HomeMy WebLinkAbout2018 Audit ReportTOWN OF TAOS FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
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I NTRODUCTORY SECTION
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STATE OF NEW MEXICO
Town of Taos
June 30, 2018
Table of Contents
INTRODUCTORY SECTION Exhibit Page
Table of Contents 4-5
Official Roster 6
FINANCIAL SECTION
Independent Auditors' Report 8-10
Management's Discussion and Analysis 12-20
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements:
Statement of Net Position A-1 22-23
Statement of Activities A-2 24-25
Fund Financial Statements:
Balance Sheet - Governmental Funds B-1 26-27
Reconciliation of the Balance Sheet to the Statement of Net Position 29
Statement of Revenues, Expenditures, and Changes in Fund
Balances - Governmental Funds B-2 30-31
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities 33
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budget (Non-GAAP Budgetary Basis) and Actual:
General Fund C-1 34
Lodgers' Tax Special Revenue Fund C-2 35
Statement of Net Position - Proprietary Funds D-1 36-39
Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds D-2 40-41
Statement of Cash Flows - Proprietary Funds D-3 42
Statement of Fiduciary Assets and Liabilities - Agency Funds E-1 43
NOTES TO THE FINANCIAL STATEMENTS 44-83
Statement/
Schedule Page
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Proportionate Share of the Net Pension Liability A-1 86-91
Schedule of the Town's Contributions - Public Employees Retirement Association Plan A-2 92-97
Notes to Required Supplementary Information 99
Schedule of Proportionate Share of the Net OPEB Liability B-1 100
Schedule of the Town's Contributions - Retiree Health Care OPEB Plan B-2 101
SUPPLEMENTARY INFORMATION
Nonmajor Fund Descriptions 104-107
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds A-1 108-113
Combining Statement of Revenues, Expenditures, and Changes in
Fund Balances - Nonmajor Governmental Funds A-2 114-119
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STATE OF NEW MEXICO
Town of Taos
June 30, 2018
Table of Contents
Statement/
Schedule Page
SUPPORTING SCHEDULES
Schedule of Deposit and Investment Accounts I 122-123
Schedule of Collateral Pledged by Depository For Public Funds II 124
Schedule of Changes in Fiduciary Assets and Liabilities - Agency Funds III 125
COMPLIANCE SECTION
Report on Internal Control Over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards 128-129
FEDERAL FINANCIAL ASSISTANCE
Report on Compliance for Each Major Federal Program and on Internal Control
Over Compliance Required by the Uniform Guidance 132-133
Schedule of Expenditures of Federal Awards IV 134-135
Schedule of Findings and Questioned Costs V 137-138
OTHER DISCLOSURES 139
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STATE OF NEW MEXICO
Town of Taos
Official Roster
June 30, 2018
Town Council
Title
Mayor
Town Councilor
Town Councilor
Town Councilor
Town Councilor
Administration
Name
Daniel Barrone
Nathaniel Evans
Darien D. Fernandez
George “Fritz” Hahn
Pascualito Maestas
Richard Bellis
Marietta Fambro
Francella Garcia
Richard Chavez
Stephen Ross
Town Manager
Finance Director
Town Clerk
Municipal Judge
Town Attorney
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F INANCIAL SECTION
7
CORDOVA CPAs LLC
CERTIFIED PUBLIC ACCOUNTANTS | BUSINESS ADVISORS cordovacpas.com
INDEPENDENT AUDITORS’ REPORT
Town Council
Town of Taos
Wayne Johnson
New Mexico State Auditor
U.S. Office of Management and Budget
Taos, New Mexico
Report on Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, the aggregate remaining fund information, and the budgetary comparisons for the
general fund and major special revenue fund of the Town of Taos (the Town), as of and for the year ended
June 30, 2018, and the related notes to the financial statements which collectively comprise the Town’s basic
financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatements, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our
audit in accordance with auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
8
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund, the
aggregate remaining fund information, and the budgetary comparison of the General Fund and major special
revenue fund of the Town, as of June 30, 2018, and the respective changes in financial position and, where
applicable, cash flows thereof, for the year then ended in accordance with accounting principles generally
accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis on pages 12 through 20 and Schedules A-1 through B-2 and the notes to the Required
Supplementary Information on pages 86 through 101 be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for
placing the basic financial statements in an appropriate operational, economic, or historical context. We have
applied certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency with
management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We do not express an opinion or provide any assurance on
the information because the limited procedures do not provide us with sufficient evidence to express an
opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Town’s basic financial statements. The introductory section, the combining and individual fund
financial statements, the Schedule of Expenditures of Federal Awards, as required by Title 2 U.S. Code of
Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements
for Federal Awards (Uniform Guidance) and Supporting Schedules I through III required by 2.2.2 NMAC are
presented for the purposes of additional analysis and are not a required part of the basic financial statements
The combining and individual fund financial statements, the Schedule of Expenditures of Federal Awards and
Supporting Schedules I through III required by Section 2.2.2 NMAC are the responsibility of management and
were derived from and relate directly to the underlying accounting and other records used to prepare the
basic financial statements. Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare the
basic financial statements or to the basic financial statements themselves, and other additional procedures in
accordance with the auditing standards generally accepted in the United States of America. In our opinion, the
combining and individual fund financial statements, the Schedule of Expenditures of Federal Awards, and
Supporting Schedules I through III required by Section 2.2.2 NMAC are fairly stated, in all material respects, in
relation to the basic financial statements as a whole.
The introductory section has not been subjected to the auditing procedures applied in the audit of the basic
financial statements, and accordingly, we do not express an opinion or provide any assurance on them.
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Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 5, 2018
on our consideration of the Town’s internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose
of that report is to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on the internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the Town’s internal control over financial reporting and
compliance.
Cordova CPAs LLC
Albuquerque, New Mexico
December 5, 2018
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11
STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2018
We are pleased to present the Town of Taos’s financial statements for the fiscal year ended June 30, 2018.
Management’s discussion and analysis of these statements is also provided to help the reader fully understand
the Town’s financial condition.
FINANCIAL HIGHLIGHTS
The Town of Taos’ total assets exceeded its total liabilities at the close of the fiscal year by $82,792,482
(net position). Of this amount, ($6,532,977) is (unrestricted net position), due to the on-going
implementation of GASB Statement No. 68 and the implementation of GASB Statement No. 75. The
current year OPEB Liability is the underlying factor of this negative unrestricted net position. GASB
Statement No. 75 is reflected on the financial statements for the first time in the history of the Town and
GASB Statement No. 68 is reflected on the financial statements for the fourth time in the history of the
Town and other governmental entities throughout the entire state. Even though ending the year with
this negative amount, the Town has at this time the available cash balances to meet the government’s
ongoing obligations to its citizens and creditors.
The Town’s total net position increased by $3,008,901 during the fiscal year. The majority of this overall
increase was due to increases in charges for services, capital grants (again this year is due mainly to the
Airport Runway Construction project) and taxes.
As of June 30, 2018, the Town’s governmental activities reported a combined ending net position
balance of $56,523,553. Of this total, $5,852,733 is designated for special revenue, debt service and
capital projects.
At the close of the current fiscal year, the unassigned fund balance for the general fund was $4,061,879,
amounting to 40 percent of total general fund expenditures.
The Town of Taos’ total debt had a net decrease of $1,480,143 during the year due to scheduled
principal payments being paid, the retirement of a NMFA Series 2008A loan for landfill construction, and
the early retirement of two Revenue Bonds for water and sewer and one NMFA loan for water and
sewer improvements. The early retirement of these three loans saved taxpayers over $150,000 of
interest and was a contributing factor to the net decrease of debt. Compensated absences increased by
$76,792 from last fiscal year due to filling of vacant positions and less leave taken during the year. The
Town paid $1,081,857 towards the principal of various of its government loans, bonds, compensated
absences and contracts payable
Overview of the Financial Statements
The Town’s basic financial statements comprise three components: 1) government-wide financial statements; 2)
fund financial statements; and 3) notes to the financial statements. This report also contains other
supplementary information in addition to the basic financial statements themselves.
Government‐wide financial statements. The government‐wide financial statements are designed to provide
readers with a broad overview of the Town of Taos’ finances, in a manner similar to a private-sector business.
The statement of net position presents information on all of the Town of Taos’ assets and liabilities, with the
difference between the two reported as net position. Over time, increases or decreases in net position may serve
as a useful indicator regarding whether or not the financial position of the Town of Taos is improving or
deteriorating.
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2018
The statement of activities presents information showing how the government’s net position changed during the
most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the
change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this
statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and
earned but unused personal leave).
Both of the government-wide financial statements distinguish functions of the Town of Taos that are principally
supported in a majority by taxes and a minimal amount from other miscellaneous receipts (governmental
activities) from other functions that are intended to recover all or a significant portion of their costs through user
fees and charges (business‐type activities). The governmental activities of the Town of Taos include general
government, public safety, public works, culture and recreation, and health and welfare. The business-type
activities of the Town include joint water and sewer services, solid waste services, and the Taos Regional
Landfill.
The government-wide financial statements can be found in Exhibits A-1 and A-2 of this report.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over
resources that have been segregated for specific activities or objectives. The Town of Taos, like other state and
local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. All of the funds of the Town of Taos can be divided into three categories: governmental funds,
proprietary funds, and fiduciary funds.
Governmental Funds. Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the government-wide
financial statements, governmental fund financial statements focus on daily inflows and outflows of spendable
resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information
may be useful in determining what financial resources are available in the near future to finance the Town’s
programs.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is
useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government-wide financial statements. By doing so, readers may better
understand the long-term impact of the government’s near term financing decisions. Both the governmental
fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund
balances provide a reconciliation to facilitate this comparison between governmental funds and governmental
activities.
The Town of Taos maintains twenty-nine individual governmental funds organized according to their type
(special revenue, debt service and capital projects). Information is presented separately in the governmental
fund balance sheet and statement of revenues, expenditures, and changes in fund balances for the General Fund
and Capital Projects, which are considered major funds. Data from the other twenty-seven governmental funds
are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor
governmental funds is provided in the form of combining statements elsewhere in this report.
The Town of Taos adopts an annual appropriated budget for its general fund, capital equipment replacement,
special revenue fund, fire, police, GRT, and all other funds. A budgetary comparison statement has been
provided for the General Fund to demonstrate compliance with this budget. In addition, the individual financial
statements of the nonmajor governmental fund types include budgetary comparison data.
The basic governmental fund financial statements can be found in Exhibits B-1 through C-2 of this report.
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2018
Proprietary funds. Proprietary funds are generally used to account for services for which the Town charges
customers – either outside customers or internal units or departments of the Town. Proprietary funds provide
the same type of information as shown in the government-wide financial statements, only in more detail. The
Town maintains one type of proprietary fund.
Enterprise funds. Are used to report the same functions presented as business-type activities in the
government-wide financial statements. The Town uses enterprise funds to account for the joint water and sewer
services, solid waste and regional landfill operations for the Town. The enterprise funds are considered to be
major funds of the Town and can be found in Exhibits D-1 through D-3 of this report.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the
government. Fiduciary funds are not reflected in the government-wide financial statement because the
resources of those funds are not available to support the Town of Taos’ own programs. The accounting used for
fiduciary funds is much like that used for proprietary funds.
The Town of Taos fiduciary funds account for the collection of street cut permits and deposits for recreation
events. The basic fiduciary fund financial statement can be found in Exhibit E-1 of this report.
Notes to the financial statements. The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements. The notes to the
financial statements can be found on pages 44-83 of this report.
Combining statements. The combining statements referred to earlier in connection with nonmajor
governmental funds are presented immediately following the notes to the financial statements. Combining and
individual fund statements and schedules can be found on pages 108-113 of this report.
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2018
GOVERNMENT‐WIDE FINANCIAL ANALYSIS
Analysis of Net Position
As noted earlier, the net of assets over liabilities, otherwise known as net position, may serve over time as a
useful indicator of a government’s financial position. In the case of the Town of Taos, assets exceeded liabilities
by $82,792,482 at the close of the current fiscal year.
The significant portion of the Town of Taos’ net position represents the Town’s investment of $82,371,908 in
capital assets (e.g., land improvements, buildings, infrastructure and machinery & equipment), less any related
outstanding debt used to acquire those assets. The Town of Taos uses these capital assets to provide services to
its citizens, so these assets are not available for future spending. Although the Town of Taos’ investment in its
capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt
must be provided from other sources, since the capital assets themselves cannot be used to liquidate these
liabilities.
Governmental Business-Type
Activities Activities Total
Assets
Current and other assets 11,582,527$ 8,512,129$ 20,094,656$
Restricted cash, cash equivalents & investments 363,048 1,336,700 1,699,748
Restricted investments -75,400 75,400
Bond issuance costs and discount ---
Capital assets, net of accumulated 66,787,137 25,676,205 92,463,342
depreciation
Total assets 78,732,712 35,600,434 114,333,146
Deferred Outflows of Resources
Deferred Outflows - pension 2,322,758 195,271 2,518,029
Defered Outflows - OPEB 98,369 13,339 111,708
Total deferred outflows of resources 2,421,127 208,610 2,629,737
Total assets and deferred outflows of resources 81,153,839$ 35,809,044$ 116,962,883$
Liabilities `
Current Liabilities 2,036,492$ 1,756,309$ 3,792,801$
Non-current liabilities 20,040,725 7,436,263 27,476,988
Total liabilities 22,077,217 9,192,572 31,269,789
Deferred Inflows of Resources
Defered Inflows - pension 1,398,787 191,021 1,589,808
Deferred Inflows - OPED 1,154,282 156,522 1,310,804
Total deferred inflows of resources 2,553,069 347,543 2,900,612
Net Position
Net investment in capital assets 61,076,960 21,294,948 82,371,908
Restricted 5,852,733 1,100,818 6,953,551
Unrestricted (10,406,140) 3,873,163 (6,532,977)
Total net position 56,523,553$ 26,268,929$ 82,792,482$
Total Liabilities and Net Position 81,153,839$ 35,809,044$ 116,962,883$
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2018
A portion of the Town of Taos’ governmental restricted net position of $5,852,733 (10 percent) represents
resources that are subject to restrictions related to covenants arising from the Town’s long-term debt issuance
and capital projects. The remaining balance of unrestricted net position, ($10,406,140) previously stated,
continue to fall to a negative due to the implementation of GASB Statement 68 and now the implementation of
GASB Statement 75. In the previous year, this amount was ($4,002,930), the last three years of implementation
of GASB Statement 68 and updates on what goes into the calculations. Taking that negative into consideration
the Town still has the available cash to meet the government’s ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the Town of Taos is able to report positive balances in all categories of net
position for both governmental and business-type activities.
Analysis of Changes in Net Position
The Town’s net position increased by $3,008,901 during the fiscal year. This increase is primarily the result of
increased operating and capital grants, and gross receipts taxes during the fiscal year. The Airport Runway
project is the main contributing factor along with the Improvements to the Youth and Family Center, which were
both completed in the current fiscal year.
Governmental Business-type
Revenues Activities Activities Total
Program revenues:
Charges for service 945,505$ 6,424,535$ 7,370,040$
Operating grants and contributions 1,231,692 - 1,231,692
Capital grants and contributions 5,139,840 5,139,840
General revenues:
Property taxes, levied for general purposes 1,015,766 - 1,015,766
Gross receipts taxes 10,878,393 487,819 11,366,212
Gasoline, franchise and motor vehicle 735,742 - 735,742
Lodger's Taxes 1,189,436 - 1,189,436
Interest income (loss)45,741 10,331 56,072
Miscellaneous income 120,807 16,806 137,613
Transfer to other entity - -
Loss on disposal of capital assets - - -
Total Revenues 21,302,922 6,939,491 28,242,413
Program expenses:
General government 9,653,694$ -$ 9,653,694$
Public safety 3,549,246 - 3,549,246
Public works 1,468,219 - 1,468,219
Culture and recreation 2,981,746 - 2,981,746
Health and welfare 19,600 - 19,600
Interest and other costs 219,338 - 219,338
Joint water and sewer - 4,832,730 4,832,730
Solid waste - 1,402,020 1,402,020
Taos Regional Landfill - 1,106,919 1,106,919
Total Expenses 17,891,843 7,341,669 25,233,512
Change in net position 3,411,079 (402,178) 3,008,901
Net Position, beginning 59,136,716 27,488,004 86,624,720
Net Position,restatement (Note 16)(6,024,242) (816,897) (6,841,139)
Net Position, beginning as restated 53,112,474 26,671,107 79,783,581
Net Position, ending 56,523,553$ 26,268,929$ 82,792,482$
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STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2018
Governmental activities. Governmental activities increased the Town of Taos’ net position by $3,411,079
primarily as the result of increase in operating and capital grants and (as previously stated the Airport Runway
project and the Youth and Family Center Improvements) and gross receipts taxes.
Tax revenues account for $13,819,337 or 65 percent of governmental revenues. Tax revenues are made up of
property, gross receipts, gasoline and motor vehicle and other taxes.
The General fund received the majority of the Town’s program revenue, accounting for $11,620,567 or 55
percent of total governmental revenues. The primary recipients of these revenues are general government,
public works and public safety.
The Town’s direct charges to users of governmental services made up $945,505 or 4 percent of total
governmental revenues. These charges are for fees, fines and forfeitures, and licenses and permits.
Business‐type activities. Business-type activities decreased the Town’s net position by $402,178, primarily as
the result of higher expenditures for operations.
The Town’s direct charges to users of business-type services made up $6,424,535 or 93 percent of total
business-type revenues. These charges are for water and sewer services, water and sewer connection fees,
landfill tipping fees and solid waste services. These direct charges for service increased by $254,305 from the
previous year, primarily as the result of the CIP increase. Even though revenues were up, expenditures exceeded
revenues in the joint water and sewer program which contributed to the decrease in the net position. The Town
still continues looking at the joint water and sewer program in ways to reduce expenditures, such as refunding of
debt service and analysis of direct cost of employees expensed to the program.
FINANCIAL ANALYSIS OF THE TOWN’S FUNDS
The Town of Taos uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements.
Governmental funds. The focus of the Town of Taos’ governmental funds is to provide information on near-term
inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Town of Taos’
financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s
net resources available for spending at the end of the fiscal year. Types of Governmental funds reported by the
Town include the General Fund, Special Revenue Funds, Debt Service Funds and Capital Projects Funds.
Revenues for governmental functions overall totaled approximately $21,289,491 in the fiscal year ended June 30,
2018, which represents an decrease of $5,996,577 from the fiscal year ended June 30, 2017. This is largely due
to the decrease in federal and state capital grants. Expenditures for governmental functions, totaling
$20,953,718 decreased by approximately $6,154,134 from the fiscal year ended June 30, 2017. This is largely
due to the decrease in expenditures for public works and capital outlay due to several infrastructure projects
being completed in last fiscal with the balance of only the (Airport Runway Construction) fully completed this
fiscal year. In the fiscal year ended June 30, 2018, revenues for governmental functions exceeded expenditures
by approximately $335,773.
The General Fund is the chief operating fund of the Town of Taos. It is from here that the Town pays for public
safety and other basic services it provides to its citizens. At the end of the current fiscal year, unassigned fund
balance of the general fund was $4,061,879 along with a minimum fund balance of $841,558.
Overall, the general fund’s performance resulted in revenues over expenditures in the fiscal year ended June 30,
2018 of $1,521,869 a decrease of $134,862 over the comparable figure from the prior year of $1,656,731. The
Town’s overall financial position improved with continued music venue and community events for tourists and
locals alike bringing in additional gross receipts tax.
17
STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2018
Proprietary Funds. The Town’s proprietary funds provide the same type of information found in the
government-wide financial statements, but in more detail.
At the end of the fiscal year, the unrestricted net position for enterprise funds were $3,873,163. The total
decrease in net position for the enterprise funds was ($402,178) compared to ($438,947) from the prior year,
but with a total net position restatement (Note 16) implementation of GASB Statement No. 75 of ($816,897).
This was due to a few large maintenance expenditures and operating costs along with continued funding of our
current asset management plan along with the other items previously addressed in the discussion of the Town’s
business-type activities.
Fiduciary Funds. The Town maintains fiduciary funds for the assets associated with bid bonds, street cuts
permits and recreation deposits. Changes to the fiduciary funds were immaterial for the fiscal year.
General Fund Budgetary Highlights
Town budgets reflect the same pattern as seen in the revenue and expenditures of the Town. The State of New
Mexico budget process is defined under state law and regulation. To enhance the process of developing a budget
at the Town level, Taos utilizes goals and objectives defined by the Town Council, community input meetings,
long term plans and input from various staff groups to develop the Town budget. Town defines its priorities
through this process.
The following table examines the summary budget performance of the general fund for the fiscal year ending
June 30, 2018. Detailed budget performance is examined through the Statement of Revenues, Expenditures, and
Changes in Fund Balance for the General fund found at Exhibit C-1. The Town’s final budget differs from the
original budget due to amendments that were made during the fiscal year and the increase of expenditures.
Actual general fund expenditures were $5,542 less than budgeted. This year we made major adjustments at mid-
year to fund certain capital needs in the Police Department from vacancy savings.
Budget Amounts
Original Final
Expenditures:
General government 4,843,513$ 4,288,012$ 4,170,719$ 117,293$
Public safety 3,548,026 3,094,639 3,162,021 (67,382)
Public works 1,237,525 1,096,702 1,106,568 (9,866)
Culture and recreation 1,843,384 1,624,887 1,659,390 (34,503)
Capital outlay - - - -
Total Expenditures 11,472,448$ 10,104,240$ 10,098,698$ 5,542$
Actual (GAAP
Basis)
Favorable
(Unfavorable)
Variance
18
STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2018
Capital Asset and Debt Administration
Capital assets. The Town of Taos’ capital assets for its governmental and business-type activities as of June 30,
2018 amount to $92,463,342 (net of accumulated depreciation). Capital assets include land, land improvements,
buildings and improvements, furniture, fixtures and equipment, and infrastructure. The Town’s capital assets
for the current fiscal year increased $2,809,287 for governmental activities and decreased $1,313,128 for
business-type activities (net of accumulated depreciation).
The significant additions to capital assets during the year were as follows:
$6,862,593 of additions to governmental infrastructure and equipment/vehicles for completion and/or
purchase of the following –Airport Runway Improvements final construction, Resurfacing of La Posta,
Liebert, Dolan, Montoya & Camino de Medio Roads, Youth & Family Center Improvements Phase II, 3
Portable Restrooms, and 2 police units.
$618,734 of additions to the business-type infrastructure and equipment of the following – Water
System Improvements and new compactor for the Taos Regional Landfill.
Governmental Business-like
Activities Activities Total
Land 6,615,288$ 262,422$ 6,877,710$
Constuction in progress 369,610 21,447 391,057
Land improvements 7,461,945 104,895 7,566,840
Buildings and improvements 35,637,895 4,656,981 40,294,876
Machinery and Equipment 16,171,287 9,646,954 25,818,241
Infrastructure 83,620,357 38,382,664 122,003,021
Total capital assets 149,876,382 53,075,363 202,951,745
Less: accumulated depreciation (83,089,245) (27,399,158) (110,488,403)
Total property, plant and equipment, net
of accumulated depreciation 66,787,137$ 25,676,205$ 92,463,342$
For government-wide financial statement presentation purposes, all depreciable capital assets were depreciated
from acquisition date to the end of the current fiscal year. Fund financial statements record capital asset
purchases as expenditures. See Note 6 in the accompanying Notes to the Financial Statements for further
information regarding capital assets.
19
STATE OF NEW MEXICO
Town of Taos
Management’s Discussion and Analysis
June 30, 2018
Debt Administration. At the end of the current fiscal year, the Town of Taos had total long-term obligations
outstanding of $12,545,609. As stated in the Financial Highlights the Town retired one schedule loan for landfill
and three early retirement for our water and sewer revenue bonds/loan. In total we decreased our outstanding
debt by $1,480,143 from the previous fiscal year. The Town continues to look at options at either paying off
early or refinancing those loans with higher interest rates and low balances to further reduce our outstanding
debt.
Governmental Business-type
Activities Activities Total
Revenue Bonds 3,675,000$ 1,657,600$ 5,332,600$
NMFA amd RUS Loans 2,003,692 2,723,657 4,727,349
USDA Contract Payable - - -
Compensated absences 676,294 96,436 772,730
Landfill Closure Liability - 1,712,930 1,712,930
Total long-term liabilities 6,354,986$ 6,190,623$ 12,545,609$
See Note 7 in the accompanying Notes to the Financial Statements for further information regarding the Town of
Taos’ long-term debt.
The Town knows of no currently known facts, decisions or conditions that are expected to have a significant
effect on financial position or results of operations.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the Town of Taos’ finances for all of those with
an interest in the government’s finances. Questions concerning any of the information provided in this report or
requests for additional financial information should be addressed to the Town of Taos – Finance Director, Town
of Taos, 400 Camino de la Placita, Taos, New Mexico, 87571, (575) 751-2024.
20
B ASIC
FINANCIAL STATEMENTS
21
STATE OF NEW MEXICO
Town of Taos
Statement of Net Position
June 30, 2018
Governmental
Activities
Business‐type
Activities Total
Assets
Current assets
Cash and cash equivalents 6,473,528$ 5,853,589$ 12,327,117$
Investments 2,412,104 1,596,460 4,008,564
Receivables:
Property taxes 169,677 - 169,677
Taxes receivable 1,991,436 75,684 2,067,120
Due from other governments 358,279 - 358,279
Customer receivable, net - 996,712 996,712
Inventory 133,193 33,994 167,187
Internal balances 44,310 (44,310) -
Total current assets 11,582,527 8,512,129 20,094,656
Noncurrent assets
Restricted cash and cash equivalents 363,048 1,336,700 1,699,748
Restricted investments - 75,400 75,400
Capital assets 149,876,382 53,075,363 202,951,745
Less: accumulated depreciation (83,089,245) (27,399,158) (110,488,403)
Total noncurrent assets 67,150,185 27,088,305 94,238,490
Total assets 78,732,712 35,600,434 114,333,146
Deferred outflows of resources
Deferred outflows- pension 2,322,758 195,271 2,518,029
Deferred outflows- OPEB 98,369 13,339 111,708
Total deferred outflows of resources 2,421,127 208,610 2,629,737
Total assets and deferred outflows of resources 81,153,839$ 35,809,044$ 116,962,883$
The accompanying notes are an integral part of these financial statements.22
Exhibit A-1
Governmental
Activities
Business‐type
Activities Total
Liabilities
Current liabilities
Accounts payable 616,121$ 941,599$ 1,557,720$
Accrued payroll 287,808 39,669 327,477
Accrued compensated absences 328,626 60,833 389,459
Deposits held in trust for others 5,103 311,282 316,385
Accrued interest 21,582 65,275 86,857
Current portion of bonds and notes payable 777,252 337,651 1,114,903
Total current liabilities 2,036,492 1,756,309 3,792,801
Noncurrent liabilities
Accrued compensated absences 347,668 35,603 383,271
Bond premiums, net of accumulated
amortization of $39,357 31,485 - 31,485
Bonds payable 3,275,000 1,657,600 4,932,600
Loans and notes payable 1,626,440 2,386,006 4,012,446
Landfill closure and post-closure - 1,712,930 1,712,930
Net pension liability 9,688,544 956,408 10,644,952
Net OPEB liability 5,071,588 687,716 5,759,304
Total noncurrent liabilities 20,040,725 7,436,263 27,476,988
Total liabilities 22,077,217 9,192,572 31,269,789
Deferred inflows of resources
Deferred inflows- pension 1,398,787 191,021 1,589,808
Deferred inflows- OPEB 1,154,282 156,522 1,310,804
Total deferred inflows of resources 2,553,069 347,543 2,900,612
Net position
Net investment in capital assets 61,076,960 21,294,948 82,371,908
Restricted for:
Debt service 856,292 - 856,292
Capital projects 2,251,585 - 2,251,585
Special revenue projects 2,744,856 - 2,744,856
Landfill - 1,100,818 1,100,818
Unrestricted (10,406,140) 3,873,163 (6,532,977)
Total net position 56,523,553 26,268,929 82,792,482
Total liabilities, deferred inflows of resources, and
net position 81,153,839$ 35,809,044$ 116,962,883$
The accompanying notes are an integral part of these financial statements.23
STATE OF NEW MEXICO
Town of Taos
Statement of Activities
For the Year Ended June 30, 2018
Functions/Programs
Primary Government Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Governmental Activities:
General government 9,653,694$ 768,922$ 856,656$ -$
Public safety 3,549,246 - 361,769 -
Public works 1,468,219 - 13,267 5,139,840
Culture and recreation 2,981,746 176,583 - -
Health and welfare 19,600 - - -
Interest and other costs 219,338 - - -
Total governmental activities 17,891,843 945,505 1,231,692 5,139,840
Business-type Activities:
Water and Sewer 4,832,730 3,626,433 - -
Solid Waste 1,402,020 1,399,857 - -
Taos Regional Landfill 1,106,919 1,398,245 - -
Total business-type activities 7,341,669 6,424,535 - -
Total 25,233,512$ 7,370,040$ 1,231,692$ 5,139,840$
General Revenues:
Taxes:
Gross receipts taxes
Property taxes, levied for general purposes
Gasoline, franchise and motor vehicle
Lodger's taxes
Investment income
Miscellaneous revenue
Total general revenues
Change in net position
Net position, beginning
Net position, restatement (note 16)
Net position, as restated
Net position, ending
Program Revenues
The accompanying notes are an integral part of these financial statements.24
Exhibit A-2
Governmental
Activities
Business-type
Activities Total
(8,028,116)$ -$ (8,028,116)$
(3,187,477) - (3,187,477)
3,684,888 - 3,684,888
(2,805,163) - (2,805,163)
(19,600) - (19,600)
(219,338) - (219,338)
(10,574,806) - (10,574,806)
- (1,206,297) (1,206,297)
- (2,163) (2,163)
- 291,326 291,326
- (917,134) (917,134)
(10,574,806) (917,134) (11,491,940)
10,878,393 487,819 11,366,212
1,015,766 - 1,015,766
735,742 - 735,742
1,189,436 - 1,189,436
45,741 10,331 56,072
120,807 16,806 137,613
13,985,885 514,956 14,500,841
3,411,079 (402,178) 3,008,901
59,136,716 27,488,004 86,624,720
(6,024,242) (816,897) (6,841,139)
53,112,474 26,671,107 79,783,581
56,523,553$ 26,268,929$ 82,792,482$
Net (Expense) Revenue and Changes in Net Position
The accompanying notes are an integral part of these financial statements.25
General Fund
Lodgers' Tax
Special Revenue
Fund
Airport
Construction
Capital Projects
Fund
Assets
Cash and cash equivalents 2,732,468$ 421,241$ 248,397$
Investments 883,748 - -
Receivables:
Property taxes 169,677 - -
Taxes receivable 1,590,555 120,684 -
Due from other governments 3,589 21,951 143,478
Inventory 129,905 3,288 -
Due from other funds 81,408 - -
Total assets 5,591,350$ 567,164$ 391,875$
Liabilities, deferred inflows
of resources, and fund balances
Liabilities
Accounts payable 157,380$ 116,235$ 177,257$
Accrued payroll 270,942 13,378 -
Deposits held in trust for others - - -
Due to other funds 800 - -
Total liabilities 429,122 129,613 177,257
Deferred inflows of resources
Unavailable revenue - property taxes 128,886 - -
Total deferred inflows of resources 128,886 - -
Fund balances
Nonspendable:
Inventory 129,905 3,288 -
Spendable:
Restricted for:
General government - - -
Public safety - - -
Culture and recreation - 434,263 -
Health and welfare - - -
Transportation and roads - - -
Capital improvements - - 214,618
Debt service - - -
Committed to:
General government - - -
Public safety - - -
Culture and recreation - - -
Transportation and roads - - -
Capital improvements - - -
Minimum fund balance 841,558 - -
Unassigned 4,061,879 - -
Total fund balances 5,033,342 437,551 214,618
Total liabilities, deferred inflows of
resources, and fund balances 5,591,350$ 567,164$ 391,875$
Town of Taos
STATE OF NEW MEXICO
June 30, 2018
Governmental Funds
Balance Sheet
The accompanying notes are an integral part of these financial statements.26
Exhibit B-1
Page 1 of 2
1999 Gasoline Tax
Acquisition Debt
Service Fund
Other
Governmental
Funds Total
735,906$ 2,698,564$ 6,836,576$
101,424 1,426,932 2,412,104
- - 169,677
- 280,197 1,991,436
- 189,261 358,279
- - 133,193
- 800 82,208
837,330$ 4,595,754$ 11,983,473$
-$ 165,249$ 616,121$
- 3,488 287,808
- 5,103 5,103
- 37,098 37,898
- 210,938 946,930
- - 128,886
- - 128,886
- - 133,193
- 284,475 284,475
- 622,757 622,757
- 19,038 453,301
- 1 1
- 15,297 15,297
837,330 771,045 1,822,993
- 397,103 397,103
- 113,416 113,416
- 9,828 9,828
- 25,935 25,935
- 339,020 339,020
- 1,789,224 1,789,224
- - 841,558
- (2,323) 4,059,556
837,330 4,384,816 10,907,657
837,330$ 4,595,754$ 11,983,473$
The accompanying notes are an integral part of these financial statements.27
Page Left Intentionally Blank
28
STATE OF NEW MEXICO Exhibit B-1
Town of Taos Page 2 of 2
Reconciliation of the Balance Sheet to the Statement of Net Position
Governmental Funds
June 30, 2018
Amounts reported for governmental activities in the Statement of
Net Position are different because:
Fund balances - total governmental funds 10,907,657$
Capital assets used in governmental activities are not financial resources
and, therefore, are not reported in the funds 66,787,137
Delinquent property taxes not collected within sixty days after year end are
not considered "available" revenues and are considered to be unavailable
revenue in the fund financial statements, but are considered revenue in the
Statement of Activities 128,886
Deferred outflows and inflows of resources related to pensions and OPEB are
applicable to future periods and therefore, are not reported in funds:
Deferred outflows- pension 2,322,758
Deferred outflows- OPEB 98,369
Deferred inflows- pension (1,398,787)
Deferred inflows- OPEB (1,154,282)
Certain liabilities, including loans and bonds payable and related components,
accrued interest, current and long-term portions of accrued compensated
absences, and net penison and OPEB liabilites are not due and payable in the
current period and, therefore, are not reported in the funds:
Loans and bonds payable (5,678,692)
Bond premiums (31,485)
Accrued interest (21,582)
Accrued compensated absences (676,294)
Net pension liability (9,688,544)
Net OPEB liability (5,071,588)
Net position of governmental activities 56,523,553$
The accompanying notes are an integral part of these financial statements.29
General Fund
Lodgers' Tax
Special Revenue
Fund
Airport
Construction
Capital Projects
Fund
Revenues
Taxes:
Property 1,002,335$ -$ -$
Gross receipts taxes 9,171,021 - -
Gasoline, franchise, and motor vehicle 625,973 - -
Lodger's tax - 1,189,436 -
Intergovernmental:
Federal operating grants 2,608 - -
Federal capital grants - - 4,168,353
State operating grants 90,000 - -
State capital grants - - 317,140
Charges for services 96,063 108,449 -
Licenses and fees 538,705 276 -
Investment income 27,296 - -
Miscellaneous 66,566 7,100 -
Total revenues 11,620,567 1,305,261 4,485,493
Expenditures
Current:
General government 4,170,719 - -
Public safety 3,162,021 - -
Public works 1,106,568 - -
Culture and recreation 1,659,390 983,425 -
Capital outlay - 38,445 4,613,381
Debt service:
Principal - - -
Interest - - -
Total expenditures 10,098,698 1,021,870 4,613,381
Excess (deficiency) of revenues over
expenditures 1,521,869 283,391 (127,888)
Other financing sources (uses)
Transfers in 5,456,859 793,820 -
Transfers (out)(6,829,883) (991,026) -
Total other financing sources (uses)(1,373,024) (197,206) -
Net change in fund balance 148,845 86,185 (127,888)
Fund balance - beginning of year 4,884,497 351,366 342,506
Fund balance - end of year 5,033,342$ 437,551$ 214,618$
Town of Taos
STATE OF NEW MEXICO
For the Year Ended June 30, 2018
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
The accompanying notes are an integral part of these financial statements.30
Exhibit B-2
Page 1 of 2
1999 Gasoline
Tax Acquisition
Debt Service
Fund
Other
Governmental
Funds Total
-$ -$ 1,002,335$
- 1,707,372 10,878,393
- 109,769 735,742
- - 1,189,436
- 730,489 733,097
- 574,010 4,742,363
- 408,595 498,595
57,530 22,807 397,477
- 68,134 272,646
- 133,878 672,859
1,272 17,173 45,741
11,895 35,246 120,807
70,697 3,807,473 21,289,491
- 1,211,278 5,381,997
- 234,094 3,396,115
- 28,495 1,135,063
- 138,484 2,781,299
1,078,486 1,548,257 7,278,569
- 753,231 753,231
- 227,444 227,444
1,078,486 4,141,283 20,953,718
(1,007,789) (333,810) 335,773
1,002,283 2,659,455 9,912,417
- (2,091,508) (9,912,417)
1,002,283 567,947 -
(5,506) 234,137 335,773
842,836 4,150,679 10,571,884
837,330$ 4,384,816$ 10,907,657$
The accompanying notes are an integral part of these financial statements.31
Page Left Intentionally Blank
32
STATE OF NEW MEXICO Exhibit B-2
Town of Taos Page 2 of 2
Amounts reported for governmental activities in the Statement of Activities
are different because:
Net change in fund balances - total governmental funds 335,773$
Governmental funds report capital outlays as expenditures. However, in
the statement of activities, the cost of those assets is allocated over their
estimated useful lives and reported as depreciation expense:
Capital outlay additions reported in capital outlay expenditures 7,287,641
Depreciation expense (4,478,354)
Revenues in the statement of activities that do not provide current financial
resources are not reported as revenue in the funds:
Change in deferred inflows related to the property taxes receivable 13,431
Governmental funds report Town pension and OPEB contributions as expenditures. However
in the Statement of Activities, the cost of pension and OPEB benefits earned net of employee
contributions is reported as pension and OPEB expense:
Town pension contributions subsequent to measurement date 572,581
Pension expense (912,699)
Town OPEB contributions subsequent to measurement date 98,369
OPEB expense (201,628)
Expenses in the Statement of Activities that do not require current financial
resources are not reported as expenditures in the funds:
Increase in accrued compensated absences (65,372)
Decrease in accrued interest 5,135
The issuance of long-term debt (e.g. bonds, notes, leases) provides current financial
resources to governmental funds, while the repayment of the principal of long-term
debt consumes the current financial resources of governmental funds. Neither
transaction, however, has any effect on net position. Also, governmental funds
report the effect of premiums and similar items when debt is first issued, whereas
these amounts are deferred and amortized in the Statement of Activities:
Amortization of bond premiums 2,971
Principal payments on loans 753,231
Change in net position of governmental activities 3,411,079$
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances of Governmental Funds to the Statement of Activities
For the Year Ended June 30, 2018
Governmental Funds
The accompanying notes are an integral part of these financial statements.33
STATE OF NEW MEXICO Exhibit C-1
Town of Taos
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Budgetary Basis) and Actual
For the Year Ended June 30, 2018
Variances
Original Final Actual Final to Actual
Revenues
Taxes:
Property 1,031,310$ 1,031,310$ 1,002,335$ (28,975)$
Gross receipts 9,051,845 9,356,696 9,171,021 (185,675)
Gasoline, franchise and motor vehicle 219,105 219,105 230,256 11,151
Other 378,101 378,101 395,717 17,616
Intergovernmental:
Federal operating grants - - 2,608 2,608
State operating grants 90,000 90,000 90,000 -
Charges for services 115,679 115,679 96,063 (19,616)
Licenses and fees 558,133 558,133 538,705 (19,428)
Investment income 10,222 10,222 27,296 17,074
Miscellaneous 107,687 107,687 66,566 (41,121)
Total revenues 11,562,082 11,866,933 11,620,567 (246,366)
Expenditures
Current:
General government 4,843,513 4,288,012 4,170,719 117,293
Public safety 3,548,026 3,094,639 3,162,021 (67,382)
Public works 1,237,525 1,096,702 1,106,568 (9,866)
Culture and recreation 1,843,384 1,624,887 1,659,390 (34,503)
Total expenditures 11,472,448 10,104,240 10,098,698 5,542
Excess (deficiency) of revenues over
expenditures 89,634 1,762,693 1,521,869 (240,824)
Other financing sources (uses)
Designated cash (budgeted cash increase)269,360 618,994 - (618,994)
Transfers in 4,917,620 5,456,859 5,456,859 -
Transfers (out)(5,276,614) (7,838,546) (6,829,883) 1,008,663
Total other financing sources (uses)(89,634) (1,762,693) (1,373,024) 389,669
Net change in fund balance - - 148,845 148,845
Fund balance - beginning of year - - 4,884,497 4,884,497
Fund balance - end of year -$ -$ 5,033,342$ 5,033,342$
Budgeted Amounts
The accompanying notes are an integral part of these financial statements.34
STATE OF NEW MEXICO Exhibit C-2
Town of Taos
Lodgers' Tax Special Revenue Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Budgetary Basis) and Actual
For the Year Ended June 30, 2018
Variances
Original Final Actual Final to Actual
Revenues
Taxes:
Property -$ -$ -$ -$
Gross receipts - - - -
Gasoline, franchise and motor vehicle - - - -
Lodger's tax 1,037,922 1,037,922 1,189,436 151,514
Charges for services 122,668 122,668 108,449 (14,219)
Licenses and fees - - 276 276
Miscellaneous 6,700 6,700 7,100 400
Total revenues 1,167,290 1,167,290 1,305,261 137,971
Expenditures
Current:
Culture and recreation 1,083,081 1,086,713 983,425 103,288
Capital outlay 57,787 57,787 38,445 19,342
Total expenditures 1,140,868 1,144,500 1,021,870 122,630
Excess (deficiency) of revenues over
expenditures 26,422 22,790 283,391 260,601
Other financing sources (uses)
Designated cash (budgeted cash increase) 170,783 174,415 - (174,415)
Transfers in 788,820 793,820 793,820 -
Transfers (out)(986,025) (991,025) (991,026) (1)
Total other financing sources (uses)(26,422) (22,790) (197,206) (174,416)
Net change in fund balance - - 86,185 86,185
Fund balance ‐ beginning of year - - 351,366 351,366
Fund balance ‐ end of year -$ -$ 437,551$ 437,551$
Budgeted Amounts
The accompanying notes are an integral part of these financial statements.35
Water and Sewer Solid Waste
Assets
Current assets
Cash and cash equivalents 3,910,279$ 363,207$
Investments 1,347,360 249,100
Taxes receivable 75,684 -
Customer receivables, net 651,340 199,797
Inventory 33,994 -
Total current assets 6,018,657 812,104
Noncurrent assets
Restricted cash and cash equivalents 311,282 -
Restricted investments - -
Capital assets 45,067,192 1,134,674
Less: accumulated depreciation (24,277,904) (711,161)
Total noncurrent assets 21,100,570 423,513
Total assets 27,119,227 1,235,617
Deferred outflows of resources
Deferred outflows- pension 117,000 33,287
Deferred outflows- OPEB 7,743 2,234
Total deferred outflows of resources 124,743 35,521
Total assets and deferred outflows of resources 27,243,970$ 1,271,138$
Proprietary Funds
Statement of Net Position
Town of Taos
STATE OF NEW MEXICO
June 30, 2018
The accompanying notes are an integral part of these financial statements.36
Exhibit D-1
Taos Regional
Landfill Total
1,580,103$ 5,853,589$
- 1,596,460
- 75,684
145,575 996,712
- 33,994
1,725,678 8,556,439
1,025,418 1,336,700
75,400 75,400
6,873,497 53,075,363
(2,410,093) (27,399,158)
5,564,222 27,088,305
7,289,900 35,644,744
44,984 195,271
3,362 13,339
48,346 208,610
7,338,246$ 35,853,354$
The accompanying notes are an integral part of these financial statements.37
Water and Sewer Solid Waste
Liabilities
Current liabilities
Accounts payable 404,742$ 44,753$
Accrued payroll 23,418 6,398
Accrued compensated absences 35,952 4,869
Due to other funds 34,872 3,464
Deposits held in trust for others 311,282 -
Accrued interest 64,995 -
Current maturity of loans payable 166,711 -
Total current liabilities 1,041,972 59,484
Noncurrent liabilities
Accrued compensated absences 19,152 2,423
Bonds payable 1,657,600 -
Loans and notes payable 1,293,894 -
Landfill closure and post-closure costs - -
Net pension liability 609,883 124,889
Net OPEB liability 399,204 115,178
Total noncurrent liabilities 3,979,733 242,490
Total liabilities 5,021,705 301,974
Deferred inflows of resources
Deferred inflows- pension 112,524 31,165
Deferred inflows- OPEB 90,858 26,214
Total deferred inflows of resources 203,382 57,379
Net position
Net investment in capital assets 17,671,083 423,513
Restricted for:
Landfill - -
Unrestricted 4,347,800 488,272
Total net position 22,018,883 911,785
Total liabilities and net position 27,243,970$ 1,271,138$
June 30, 2018
Proprietary Funds
Statement of Net Position
Town of Taos
STATE OF NEW MEXICO
The accompanying notes are an integral part of these financial statements.38
Exhibit D-1
Page 2 of 2
Taos Regional
Landfill Total
492,104$ 941,599$
9,853 39,669
20,012 60,833
5,974 44,310
- 311,282
280 65,275
170,940 337,651
699,163 1,800,619
14,028 35,603
- 1,657,600
1,092,112 2,386,006
1,712,930 1,712,930
221,636 956,408
173,334 687,716
3,214,040 7,436,263
3,913,203 9,236,882
47,332 191,021
39,450 156,522
86,782 347,543
3,200,352 21,294,948
1,100,818 1,100,818
(962,909) 3,873,163
3,338,261 26,268,929
7,338,246$ 35,853,354$
The accompanying notes are an integral part of these financial statements.39
Water and Sewer Solid Waste
Operating revenues
Charges for services 3,626,433$ 1,399,857$
Total operating revenues 3,626,433 1,399,857
Operating expenses
Depreciation 1,664,136 61,735
Personnel services 702,928 199,714
Contractual services 1,167,956 761,691
Supplies and purchases 12,943 8,017
Maintenance and materials 176,150 38,199
Utilities 527,581 255,742
Non-capital equipment 155,217 -
Other costs 283,379 76,922
Total operating expenses 4,690,290 1,402,020
Operating income (loss)(1,063,857) (2,163)
Non-operating revenues (expenses)
Gross receipts taxes 487,819 -
Interest expense (142,440) -
Investment income 6,900 -
Miscellaneous income 7 16,799
Total non-operating revenues (expenses)352,286 16,799
Income (loss) before contributions and transfers (711,571) 14,636
Transfers in 4,451,243 -
Transfers (out)(4,425,296) -
Change in net position (685,624) 14,636
Total net position, beginning of year 23,178,698 1,033,962
Total net position, restatement (Note 16)(474,191) (136,813)
Total net position, beginning as restated 22,704,507 897,149
Total net position, end of year 22,018,883$ 911,785$
Proprietary Funds
Statement of Revenues, Expenses, and Changes in Net Position
Town of Taos
STATE OF NEW MEXICO
For the Year Ended June 30, 2018
The accompanying notes are an integral part of these financial statements.40
Exhibit D-2
Taos Regional
Landfill Total
1,398,245$ 6,424,535$
1,398,245 6,424,535
289,525 2,015,396
317,937 1,220,579
72,885 2,002,532
3,597 24,557
873 215,222
7,349 790,672
- 155,217
415,329 775,630
1,107,495 7,199,805
290,750 (775,270)
- 487,819
576 (141,864)
3,431 10,331
- 16,806
4,007 373,092
294,757 (402,178)
1,041,000 5,492,243
(1,066,947) (5,492,243)
268,810 (402,178)
3,275,344 27,488,004
(205,893) (816,897)
3,069,451 26,671,107
3,338,261$ 26,268,929$
The accompanying notes are an integral part of these financial statements.41
Exhibit D-3
Water and
Sewer Solid Waste
Taos
Regional
Landfill Total
Cash flows from operating activities:
Cash received from user charges 3,663,120$ 1,380,314$1,403,573$ 6,447,007$
Cash payments to employees for services (654,418) (185,601) (297,338) (1,137,357)
Cash payments to suppliers for goods and services (2,020,211) (1,208,381)(29,048) (3,257,640)
Net cash provided (used) by operating activities 988,491 (13,668) 1,077,187 2,052,010
Cash flows from noncapital financing activities:
Gross receipts taxes 487,819 - - 487,819
Miscellaneous income 7 16,799 - 16,806
Landfill closure costs - - 14,600 14,600
Repayment of interfund loans 18,219 (2,414) (4,421) 11,384
Transfers (net)25,947 - (25,947) -
Net cash provided (used) by noncapital
financing activities 531,992 14,385 (15,768) 530,609
Cash flows from investing activities:
Interest on investments 6,900 - 1,407 8,307
Net cash provided by investing activities 6,900 - 1,407 8,307
Cash flows from capital and related financing activities:
Interest paid (130,451) - - (130,451)
Acquisition of capital assets (174,571) (29,878) (497,819) (702,268)
Principal payments on loans (649,821) - (168,483) (818,304)
Net cash (used) by capital and related financing activities (954,843) (29,878) (666,302) (1,651,023)
Net increase (decrease) in cash and cash equivalents 572,540 (29,161) 396,524 939,903
Cash and cash equivalents - beginning of year 3,368,265 392,368 2,128,878 5,889,511
Cash and cash equivalents- reclassification 280,756 - 80,119 360,875
Cash and cash equivalents, as reclassed 3,649,021 392,368 2,208,997 6,250,386
Cash and cash equivalents - end of year 4,221,561$ 363,207$ 2,605,521$ 7,190,289$
Reconciliation of operating income (loss) to
net cash provided (used) by operating activities:
Operating income (loss)(1,063,857)$ (2,163)$ 290,750$ (775,270)$
Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:
Depreciation 1,664,136 61,735 289,525 2,015,396
Net pension and OPEB expense 39,251 11,328 17,058 67,637
Changes in assets and liabilities:
Receivables 27,616 (19,543) 5,328 13,401
Inventory (4,965) - - (4,965)
Accounts payable 307,980 (67,810) 470,985 711,155
Accrued payroll expenses 3,833 362 (30) 4,165
Customer deposits 9,071 - - 9,071
Accrued compensated absences 5,426 2,423 3,571 11,420
Net cash provided (used) by operating activities 988,491$ (13,668)$ 1,077,187$ 2,052,010$
For the Year Ended June 30, 2018
Proprietary Funds
Statement of Cash Flows
Town of Taos
STATE OF NEW MEXICO
The accompanying notes are an integral part of these financial statements.42
STATE OF NEW MEXICO Exhibit E-1
Assets
Cash 13,997$
Investments 60,000
Total assets 73,997$
Liabilities
Due to other entities 73,997$
Total liabilities 73,997$
Statement of Fiduciary Assets and Liabilities
June 30, 2018
Town of Taos
Agency Funds
The accompanying notes are an integral part of these financial statements.43
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 1. Summary of Significant Accounting Policies
The Town of Taos (the Town) was incorporated in 1934. The Town operates under a Council-Mayor
form of government and provides the following services as authorized by its charter: public safety
(police and fire), highways and streets, public utilities (water and sewer, solid waste, and landfill),
health and social services, culture-recreation, education, public improvements, planning and zoning, and
general administrative services.
The Town of Taos is a body politic and corporate under the name and form of government selected by
its qualified electors. The Town may:
1. Sue or be sued;
2. Enter into contracts and leases;
3. Acquire and hold property, both real and personal;
4. Have common seal, which may be altered at pleasure;
5. Exercise such other privileges that are incident to corporations of like character or degree that
are not inconsistent with the laws of New Mexico.
6. Protect generally the property of its Town and its inhabitants;
7. Preserve peace and order within the Town; and
8. Establish rates for services provided by the Town utilities and revenue-producing projects,
including amounts which the governing body determines to be reasonable in the operation of
similar facilities.
This summary of significant accounting policies of Town of Taos is presented to assist in the
understanding of Town of Taos’s financial statements. The financial statements and notes are the
representation of Town of Taos’s management who is responsible for their integrity and objectivity.
The financial statements of the Town have been prepared in conformity with accounting principles
generally accepted in the United States of America (GAAP) as applied to government entities.
During the year ended June 30, 2018, the Town adopted GASB Statements No. 75, Accounting and
Financial Reporting for Postemployment Benefit Plans Other Than Pensions, No. 81, Irrevocable Split-
Interest Agreements, No. 85, Omnibus 2017, No. 86, Certain Debt Extinguishment Issues, are required
to be implemented for the fiscal year ending June 30, 2018.
The pronouncement adopted that materially affects the financial statements and disclosures of the
Town for the year ended June 30, 2018 is GASB Statement No. 75 Accounting and Financial Reporting
for Postemployment Benefit Plans Other Than Pensions. The requirements of this Statement improve
the decision-usefulness of information in employer and governmental nonemployer contributing
entity financial reports and will enhance its value for assessing accountability and interperiod equity
by requiring recognition of the entire OPEB liability and a more comprehensive measure of OPEB
expense.
At year end June 30, 2018, the Town was not required to make a GASB 77 disclosure.
A. Financial Reporting Entity
The financial reporting entity consists of (a) the primary government, (b) organizations for
which the primary government is financially accountable and (c) other organizations for which
the nature and significance of their relationship with the primary government are such that
exclusion would cause the reporting entity’s financial statements to be misleading or
incomplete.
44
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 1. Summary of Significant Accounting Policies (continued)
A. Financial Reporting Entity (continued)
In evaluating how to define the Town for financial reporting purposes, management has
considered all potential component units. The decision to include any potential component
units in the financial reporting entity was made by applying the criteria set forth in GASB
Statement No. 14, as amended by GASB Statement No. 39 and GASB Statement No. 61. Blended
component units, although legally separate entities, are in substance part of the government’s
operations. Each discretely presented component unit is reported in a separate column in the
government-wide financial statements to emphasize that it is legally separate from the
government.
The basic-but not the only-criterion for including a potential component unit within the
reporting entity is the governing body’s ability to exercise oversight responsibility. The most
significant manifestation of this ability is financial interdependency. Other manifestations of
the ability to exercise oversight responsibility include, but are not limited to, the selection of
governing authority, the designation of management, the ability to significantly influence
operations, and accountability for fiscal matters.
A second criterion used in evaluating potential component units is the scope of public service.
Application of this criterion involves considering whether the activity benefits the government
and/or its citizens.
A third criterion used to evaluate potential component units for inclusion or exclusion from the
reporting entity is the existence of special financing relationships, regardless of whether the
government is able to exercise oversight responsibilities. Finally, the nature and significance of
a potential component unit to the primary government could warrant its inclusion within the
reporting entity.
Based upon the application of these criteria, the Town has no component units, and is not a
component unit of another governmental agency.
B. Government‐wide and fund financial statements
The government-wide financial statements (i.e., the statement of net position and the statement
of activities) report information on all of the nonfiduciary activities of the primary government.
For the most part, the effect of interfund activity has been removed from these statements.
Governmental activities, which normally are supported by taxes and intergovernmental
revenues, are reported separately from business‐type activities, which rely to a significant extent
on fees and charges for support.
The Statement of Net Position and the Statement of Activities were prepared using the
economic resources measurement focus and the accrual basis of accounting. Revenues,
expenses, gains, losses, assets and liabilities resulting from exchange-like transactions are
recognized when the exchange takes place. Revenues, expenses, gains, losses, assets and
liabilities resulting from non-exchange transactions are recognized in accordance with the
requirements of GASB Statement No. 33, Accounting and Financial Reporting for Non‐Exchange
Transactions.
In the government-wide Statement of Net Position, the governmental activities column (a) is
presented on a consolidated basis by column, (b) and is reported on a full accrual, economic
resource basis, which recognizes all long-term assets and receivables as well as long-term debt
obligations. The Town’s net position is reported in three parts – net investments in capital
assets; restricted net position; and unrestricted net position. 45
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 1. Summary of Significant Accounting Policies (continued)
B. Government‐wide and fund financial statements (continued)
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Program revenues include 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function and 2) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function. Taxes and other items
not properly included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and
fiduciary funds, even though the latter are excluded from the government-wide financial
statements. Major individual governmental funds and major individual enterprise funds are
reported as separate columns in the fund financial statements.
C. Measurement focus, basis of accounting, and financial statement presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the fiduciary fund financial
statements. Revenues are recorded when earned and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. Property taxes are recognized as
revenues in the year for which they are levied. Grants and similar items are recognized as
revenue as soon as all eligibility requirements of time, reimbursement and contingencies
imposed by the provider are met.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the government considers revenues to be available if they are
collected within 60 days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences and claims and
judgments, are recorded only when payment is due.
Property taxes, franchise taxes, licenses and interest associated with the current fiscal period
are all considered to be susceptible to accrual and so have been recognized as revenues of the
current fiscal period. Sales and use taxes are classified as derived tax revenues and are
recognized as revenue when the underlying exchange takes place and the revenues are
measurable and available. Only the portion of special assessments receivable due within the
current fiscal period is considered to be susceptible to accrual as revenue of the current period.
Expenditure-driven grants are recognized as revenue when the qualifying expenditures have
been incurred and all other grant requirements have been met and the susceptible to accrual
criteria have been met. All other revenue items are considered to be measurable and available
only when cash is received by the Town.
46
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 1. Summary of Significant Accounting Policies (continued)
C. Measurement focus, basis of accounting, and financial statement presentation (continued)
Program revenues included in the Statement of Activities are derived directly from the program
itself or from parties outside the Town’s taxpayer or citizenry, as a whole; program revenues
reduce the cost of the function to be financed from the Town’s general revenues. Program
revenues are categorized as (a) charges for services, which include revenues collected for fees
and use of Town facilities, etc., (b) program-specific operating grants, which includes revenues
received from state and federal sources to be used as specified within each program grant
agreement, and (c) program-specific capital grants and contributions, which include revenues
from state sources to be used for capital projects. Internally dedicated resources are reported
as general revenues rather than as program revenues. Likewise, general revenues include all
taxes.
The Town reports all direct expenses by function in the Statement of Activities. Direct expenses
are those that are clearly identifiable with a function. The Town does not currently employ
indirect cost allocation systems. Depreciation expense is specifically identified by function and
is included in the direct expense of each function. Interest on general long-term debt is
considered an indirect expense and is reported separately on the Statement of Activities.
Proprietary funds distinguish operating revenues and expense from non-operating items.
Operating revenues and expenses generally result from providing services in connection with
the fund’s principal ongoing operations. The principal operating revenue for the Town’s
enterprise funds is charges for services for the Town’s utilities. Operating expenses for
enterprise funds include the cost of services, administrative expenses and depreciation on
capital assets. All revenues and expenses not meeting this definition are reported as non-
operating revenues and expenses
When both restricted and unrestricted resources are available for use, it is the Town’s policy to
use restricted resources first, then unrestricted resources as they are needed.
Under the requirements of GASB Statement No. 34, the Town is required to present certain of
its governmental funds as major based upon certain criteria. The major funds presented in the
fund financial statements include the following, which includes funds that were not required to
be presented as major but were at the discretion of management:
The General Fund is the government’s primary operating fund. It accounts for all
financial resources of the general government, except those required to be accounted
for in another fund. Revenues are provided through property and other taxes, federal
sources, state sources, charges for services, licenses and fees, and other miscellaneous
recoveries and revenue. Expenditures include all costs associated with the daily
operation of the Town except for items included in other funds.
The Lodgers’ Tax Special Revenue Fund is used to account for the operations of tourist
facilities or for half of advertising, promoting and publicizing such facilities and tourist
attractions. Financing is provided by one and a half percent of a five percent tax on
lodging gross receipts within the Town of Taos. State Statute Section 4-6-41 provides
for this tax to be imposed by the Town. Revenues received are pursuant to the Lodgers
Tax Act (Section 3- 38-15, NMSA 1978). Monies in the Lodgers Tax Fund may be used
to build, operate, and maintain tourism related facilities.
The Airport Construction Capital Projects Fund was created to receive proceeds from
federal and state grants for the purpose of financing improvements to the Taos
Municipal Airport. Authority is Town Council resolution. 47
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 1. Summary of Significant Accounting Policies (continued)
C. Measurement focus, basis of accounting, and financial statement presentation (continued)
The 1999 Gasoline Tax Acquisition Debt Service fund was created to receive bond
proceeds and to account for the capital outlay associated with the bond issue. Authority
is the Town Council resolution.
The Town reports its proprietary funds as major funds. Proprietary funds (enterprise funds)
include:
The Water and Sewer Fund is used to account for the activities of the Town’s water and
sewer operations.
The Solid Waste Fund accounts for the provision of solid waste services to the residents
of the Town and some residents of Taos County. All activities necessary to provide such
services are accounted for in this fund, including, but not limited to administration,
operations, maintenance, financing and related debt service, and billing and collection.
The Taos Regional Landfill Fund is used to account for the activities of the Taos
Regional Landfill including debt repayments, closure and post-closure care estimates
as well as operations and administration.
Additionally, the Town reports the following fund type:
The Fiduciary Fund is purely custodial (assets equal liabilities) and does not involve the
measurement of results of operations. This fund accounts for assets held by the Town
as a trustee for the judicial system bonds and recreational events.
As a general rule the effect of interfund activity has been eliminated from the government-wide
financial statements. Exceptions to this general rule are payments-in-lieu of taxes and various
other functions of the government. Elimination of these charges would distort the direct costs
and program revenues reported in the Statement of Activities.
D. Assets, Deferred Outflow of Resources, Liabilities, Deferred Inflow of Resources, and Net Position or
Equity
Deposits and Investments: The Town’s cash and cash equivalents are considered to be cash
on hand, demand deposits and short-term investments with original maturities of three months
or less from the date of acquisition. State statutes authorize the Town to invest in Certificates of
Deposit, obligations of the U.S. Government, and the State Treasurer’s Investment Pool.
Investments for the Town are reported at fair value. The State Treasurer’s Pool operates in
accordance with appropriate state laws and regulations. The reported value of the pool is the
same as the fair value of the pool shares.
Receivables and Payables: Interfund activity is reported as loans, services provided,
reimbursements or transfers. Loans are reported as interfund receivables and payables as
appropriate and are subject to elimination upon consolidation. Services provided, deemed to
be at market or near market rates, are treated as revenues and expenditures/expenses.
Reimbursements are when one fund incurs a cost, charges the appropriate benefiting funds and
reduces its related cost as a reimbursement. All other interfund transactions are treated as
transfers. Transfers between governmental funds are netted as part of the reconciliation to the
government-wide financial statements.
48
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 1. Summary of Significant Accounting Policies (continued)
D. Assets, Deferred Outflow of Resources, Liabilities, Deferred Inflow of Resources, and Net Position or
Equity (continued)
Advances between funds, as reported in the fund financial statements, are offset by a fund
balance reserve account in applicable governmental funds to indicate that they are not available
for appropriation and are not expendable available financial resources in the event they are not
received within 60 days after year end.
All receivables are reported at their gross value and, where appropriate, are reduced by the
estimated portion that is expected to be uncollectible. In the government-wide and
governmental fund financial statements, delinquent property taxes are recorded as revenue
when levied net of estimated refunds and uncollectable amounts.
Property taxes are levied on November 1 based on the assessed value of property as listed on
the previous January 1 and are due in two payments by November 10th and April 10th.
Property taxes uncollected after May 10th are considered delinquent. The taxes attach as an
enforceable lien on property as of January 1st. Property taxes are collected by Taos County and
are remitted monthly to the Town.
Inventory: The Town’s method of accounting for inventory is the consumption method. Under
the consumption approach, governments report inventories they purchase as an asset and defer
the recognition of the expenditures until the period in which the inventories actually are
consumed. Inventory is valued at cost.
Restricted Assets: Restricted assets consist of those funds’ expendable for operating purposes,
but restricted by donors or other outside agencies as to the specific purpose for which they may
be expended. Restricted cash in the amount of $1,699,748 and restricted investments in the
amount of $75,400, at June 30, 2018 are reported in the statement of net position.
Capital Assets: Capital assets, which include property, plant, equipment, and infrastructure
assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable
governmental activities columns in the government-wide financial statements. Capital assets
are defined by the government as assets with an initial, individual cost of more than $5,000
(amount not rounded) and an estimated useful life in excess of one year. Such assets are
recorded at historical cost or estimated historical cost if purchased or constructed. Town of
Taos was a phase II government for purposes of implementing GASB 34. Therefore, the Town
was required to report its major general infrastructure assets retroactively to June 30, 1980.
The Town has made the required restatement for infrastructure assets retroactive to June 30,
1980, in order to properly implement GASB 34. Information Technology Equipment including
software is being capitalized and included in furniture, fixtures and equipment in accordance
with NMAC 2.20.1.9 C (5). Donated assets are recorded at fair market value when received.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend assets lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Interest incurred during the construction phase of capital assets of business-type activities is
included as part of the capitalized value of the assets constructed. There was no interest
expense capitalized by the Town during fiscal year 2018. No interest was included as part of
the cost of capital assets under construction.
49
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 1. Summary of Significant Accounting Policies (continued)
D.Assets, Deferred Outflow of Resources, Liabilities, Deferred Inflow of Resources, and Net Position or
Equity (continued)
Property, plant, and equipment of the primary government are depreciated using the straight-
line method over the following estimated useful lives:
Assets Years
Land improvements 20
Buildings and improvements 10-50
Machinery and Equipment 5-25
Infrastructure (including airport) 10-50
Accrued Expenses: Accrued expenses are comprised of the payroll expenditures based on
amounts earned by the employees through June 30, 2018, along with applicable PERA, FICA,
RHC and Medicare accruals.
Deposits Held in Trust For Others: Deposits held in trust for others consists of security
deposits for the Civic Center and meter deposits as of June 30, 2018.
Deferred Outflows of Resources: In addition to assets, the balance sheet reports a separate
section for deferred outflows of resources. This separate financial statement element, deferred
outflows of resources, represents a use of net position that applies to a future period(s) and so
will not be recognized as an outflow of resources (expenditure) until that time. The Town has
four types of items that qualify for reporting in this category related to the pension and OPEB
plans which are discussed at Notes 10 and 11.
Deferred Inflows of Resources: In addition to liabilities, the balance sheet reports a separate
section for deferred inflows of resources. This separate financial statement element, deferred
inflows of resources, represents an acquisition of net position that applies to a future period(s)
and so will not be recognized as an inflow of resources (revenue) until that time. Revenue must
be susceptible to accrual (measurable and available to finance expenditures of the current fiscal
period) to be recognized. If assets are recognized in connection with a transaction, but those
assets are not yet available to finance expenditures of the current fiscal period, then the assets
must be offset by a corresponding liability for deferred inflows of resources. The Town has one
type of item, which arises under the modified accrual basis of accounting that qualifies for
reporting in this category. Accordingly, the item, unavailable revenue – property taxes, are
reported only in the governmental funds balance sheet. These amounts are deferred and
recognized as an inflow of resources in the period that the amounts become available. The
Town has recorded $128,886 related to property taxes that are considered “unavailable”. The
Town also has items related to the pension and OPEB plans which are discussed at Notes 10
and 11.
Compensated Absences: The Town’s employees earn personal leave at a rate of 22 to 27 days
per year based on years of service. Employees can carry over unused personal leave each year
with a cap of 500 hours.
Vested or accumulated vacation leave that is expected to be liquidated with expendable
available financial resources is reported as an expenditure and a fund liability of the
governmental or proprietary fund that will pay it. In prior years, substantially all of the related
expenditures have been liquidated by the general fund. Amounts of vested or accumulated
vacation leave that are not expected to be liquidated with expendable
50
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 1. Summary of Significant Accounting Policies (continued)
D.Assets, Deferred Outflow of Resources, Liabilities, Deferred Inflow of Resources, and Net Position or
Equity (continued)
Long‐term Obligations: In the government-wide financial statements, and proprietary fund
types in the fund financial statements, long-term debt and other long-term obligations are
reported as liabilities in the applicable governmental activities, business-type activities, or
proprietary fund type statement of net position. Bond premiums and discounts, are deferred
and amortized over the life of the bonds using the effective interest method or the straight-line
method if the difference is minimal. Bonds payable are reported net of the applicable bond
premium or discount. For fund financial reporting, bond premiums and discounts, as well as
issuance costs, are recognized in the period the bonds are issued.
Bond proceeds are reported as another financing source net of the applicable premium or
discount. Issuance costs, even if withheld from the actual net proceeds received, are reported
as debt service expenditures.
Pensions: For purposes of measuring the net pension liability, deferred outflows of resources
and deferred inflows of resources related to pensions, and pension expense, information about
the fiduciary net position of the Public Employees Retirement Association (PERA) and additions
to/deductions from PERA’s fiduciary net position have been determined on the same basis as
they are reported by PERA, on the economic resources measurement focus and accrual basis of
accounting. For this purpose, benefit payments (including refunds of employee contributions)
are recognized when due and payable in accordance with the benefit terms. Investments are
reported at fair value.
Postemployment Benefits Other Than Pensions (OPEB) For purposes of measuring the net
OPEB liability, deferred outflows of resources and deferred inflows of resources related to
OPEB, and OPEB expense, information about the fiduciary net position of the New Mexico
Retiree Health Care Authority (NMRHCA) and additions to and deductions from NMRHCA’s
fiduciary net position have been determined on the same basis as they are reported by
NMRHCA. For this purpose, NMRHCA recognizes benefit payments when due and payable in
accordance with the benefit terms. Investments are reported at fair value.
Fund Balance Classification Policies and Procedures: In the governmental fund financial
statements, fund balance is reported in five classifications:
Nonspendable – This classification includes amounts that cannot be spent because they are
either (a) not in spendable form, for example, inventories, prepaid amounts, long term amount
of loans and note receivable; or (b) legally or contractually required to be maintained intact, for
example, debt service reserves. The Town has nonspendable fund balance of $133,193 at June
30, 2018.
Restricted – This classification includes amounts that are restricted to a specific purpose. Fund
balances are restricted when constraints placed on the use of resources are either: (a)
externally imposed by creditors (such as debt covenants) grantors, contributors, or laws or
regulations of other governments; (b) enabling legislation, as the term is used authorizes the
Town to assess, levy, charge, or otherwise mandate payment of resources and includes a legally
enforceable requirement that those resources be used only for the specific purposes stipulated
in the legislation. The Town has $3,595,927 in restricted fund balances at June 30, 2018.
51
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 1. Summary of Significant Accounting Policies (continued)
D. Assets, Deferred Outflow of Resources, Liabilities, Deferred Inflow of Resources, and Net Position or
Equity (continued)
Committed – This classification includes amounts that can only be used for specific purposes to
constraints imposed by formal action of the highest level of Authority, the Town Council. Those
committed amounts cannot be used for any other purpose unless the Council removes or
changes the specific use by taking the same type of action (for example, resolution or
ordinance) it employed to previously commit those amounts. The Town has $3,118,981 in
committed funds at June 30, 2018 for subsequent year’s expenditures.
Assigned – This classification includes amounts that are constrained by the Town’s intent to be
used for specific purposes, but are neither restricted nor committed and should be reported as
assigned fund balance. The Town Council has delegated the authority to assign amounts to be
used for specific purposes to the Finance Director.
Minimum Fund Balance Policy: The Town’s policy for maintaining a minimum amount of
fund balance for operations is to minimize any sudden and unplanned discontinuity to
programs and operations and for unforeseen contingencies. At a minimum, the budget shall
ensure that the Town holds cash reserves of 1/12th the General Fund expenditures. The Town
has also presented committed fund balance on the governmental funds balance sheet including
$841,558 for minimum fund balance for the year ended June 30, 2018. As these amounts are an
accumulation of resources and not a true restriction or commitment of expenditures, they are
reflected within the unassigned fund balance of the general fund.
Net Position: Equity is classified as net position and displayed in three components:
a. Net Investment in Capital Assets: Net investment in capital assets consist of capital
assets, net of accumulated depreciation and reduced by the outstanding balances of any
bonds, mortgages, notes, or other borrowings that are attributable to the acquisition,
construction, or improvement of those assets.
b. Restricted Net Position: Consist of net position with constraints placed on the use
either by (1) external groups such as creditors, grantors, contributors, or laws or
regulation of other governments; or (2) law through constitutional provisions or
enabling legislation. Descriptions for the related restrictions for net position restricted
for “special revenue, and capital projects” are described on pages 47-48 and 104-107.
c. Unrestricted Net Position: All other net position that do not meet the definition of
“restricted” or “net investment in capital assets.”
Interfund Transactions: Quasi-external transactions are accounted for as revenues,
expenditures or expenses. Transactions that constitute reimbursements to a fund from
expenditures/expenses initially made from it that are properly applicable to another fund, are
recorded as expenditures/expenses in the reimbursing fund and as reductions of
expenditures/expenses in the fund that is reimbursed.
All other interfund transactions, except quasi-external transactions and reimbursements, are
reported as transfers. Nonrecurring or non-routine permanent transfers of equity are reported
as residual equity transfers. All other interfund transfers are reported as operating transfers.
52
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 1. Summary of Significant Accounting Policies (continued)
D. Assets, Deferred Outflow of Resources, Liabilities, Deferred Inflow of Resources, and Net Position or
Equity (continued)
Estimates: The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates. Significant estimates for the Town include the depreciable
lives of capital assets, estimated allowance for uncollectible accounts receivables, the Town’s
estimate landfill closure and post closure costs, and the Town’s net pension and OPEB liabilities
and related deferred inflows and outflows of resources.
NOTE 2. Stewardship, Compliance, and Accountability
Budgetary Information
Annual budgets of the Town are prepared prior to June 1 and must be approved by resolution of the
Town Councilors, and submitted to the Department of Finance and Administration for State approval.
Once the budget has been formally approved, any amendments must also be approved by the Town
Council Members and the Department of Finance and Administration. A separate budget is prepared for
each fund. Line items within each budget may be over-expended; however, it is not legally permissible
to over-expend any budget in total by fund.
Governmental fund budgets are prepared on the GAAP basis, excluding encumbrances, and secure
appropriation of funds for only one year. Carryover funds must be re-appropriated in the budget of the
subsequent fiscal year.
Proprietary fund budgets are prepared on the GAAP basis, excluding encumbrances, and secure
appropriation of funds for only one year. Carryover funds must be re-appropriated in the budget of the
subsequent fiscal year. The Town does not budget for depreciation expense, only capital outlay. The
budgetary information presented in these financial statements has been properly amended by Town
Council in accordance with the above procedures. These amendments resulted in the following changes:
Original Final
Budget Budget
Budgeted Funds:
General Fund 89,634$ 1,762,693$
Lodgers' Tax Special Revenue Fund 26,422$ 22,790$
Excess (deficiency) of
revenues over expenditures
Operating income (loss)
The accompanying Statements of Revenues, Expenditures and Changes in Fund Balance – Budget (GAAP
Basis) and Actual and Statements of Revenues, Expenses and Changes in Net Position- Budget (GAAP
Basis) and Actual present comparisons of the legally adopted budget with actual data on a budgetary
basis.
53
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 3. Deposits and Investments
State statutes authorize the investment of Town funds in a wide variety of instruments including
certificates of deposit and other similar obligations, state investment pool, money market accounts, and
United States Government obligations. All invested funds of the Town properly followed State
investment requirements as of June 30, 2018. There are no specific state laws governing the ability to
spend net appreciation and investment income.
Deposits of funds may be made in interest or non-interest-bearing checking accounts in one or more
banks or savings and loan associations within the geographical boundaries of the Town. Deposits may
be made to the extent that they are insured by an agency of the United States or collateralized as
required by statute. The financial institution must provide pledged collateral for 50% of the deposit
amount in excess of the deposit insurance.
The rate of interest on non-demand interest-bearing accounts shall be set by the State Board of Finance,
but in no case, shall the rate of interest be less than one hundred percent of the asked price on United
States treasury bills of the same maturity on the day of deposit.
Excess funds may be temporarily invested in securities which are issued by the State or by the United
States government, or by their departments or agencies, and which are either direct obligations of the
State or the United States or are backed by the full faith and credit of those governments.
All of the Town’s accounts at an insured depository institution, including all noninterest-bearing
transaction accounts, will be insured by the FDIC up to the standard maximum deposit insurance
amount of $250,000.
Custodial Credit Risk – Deposits Custodial credit risk is the risk that in the event of a bank failure, the
Town’s deposits may not be returned to it. The Town does not have a deposit policy for custodial credit
risk, other than following state statutes as set forth in the Public Money Act (Section 6-10-1 to 6-10-63,
NMSA 1978). At June 30, 2018, $13,740,288 of the Town’s deposits of $14,490,288 was exposed to
custodial credit risk. $10,175,627 was uninsured and collateralized by collateral held by the pledging
bank’s trust department, not in the Town’s name, and $3,564,661 was uninsured and uncollateralized.
Total
Amount of deposits 6,774,388$ 7,715,900$ 14,490,288$
FDIC Coverage (500,000) (250,000) (750,000)
Total uninsured public funds 6,274,388 7,465,900 13,740,288
6,274,388 3,901,239 10,175,627
Uninsured and uncollateralized -$ 3,564,661$ 3,564,661$
Collateral requirement
(50% of uninsured funds) 3,137,194$ 3,732,950$ 6,870,144$
Pledged Collateral 10,000,000 3,901,239 13,901,239
Over (Under) collateralized 6,862,806$ 168,289$ 7,031,095$
Collateralized by securities held
by pledging institution or by its
trust department or agent in
other than the Town's name
US Bank Centinel Bank
54
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 3. Deposits and Investments (continued)
The collateral pledged is listed on Schedule II of this report. The types of collateral are limited to direct
obligations of the United States Government and all bonds issued by any agency, district, or political
subdivision of the State of New Mexico.
Investments
Credit Risk
The New MexiGROW Local Government Investment Pool’s (LGIP) investments are valued at fair value
based on quoted market prices as of the valuation date. The LGIP is not SEC registered. The New Mexico
State Treasurer is authorized to invest the short-term investment funds, with the advice and consent of
the State Board of Finance, in accordance with Sections 6-10-10(I) through 6-10-10(P) and Sections 6-
10-10.1(A) and (E), NMSA 1978. The LGIP’s investments are monitored by the same policies and
procedures that apply to all other state investments. The pool does not have unit shares. Per Section 6-
10-10.1(F), NMSA 1978, at the end of each month all interest earned is distributed by the State
Treasurer to the contributing entities in amounts directly proportionate to the respective amounts
deposited in the fund and the length of time the fund amounts were invested. Participation in the LGIP is
voluntary.
As of June 30, 2018, the Town had the following investments and maturities:
Weighted Average
Investment Type Maturities Fair Value Rating
New Mexico Local Government
Investment Pool 50 Days ( R ); 100 Days ( F ) 4,143,964$ AAAm
U.S. Treasury Notes <1 year 576,916 Aaa
4,720,880$
The Town has presented $4,143,964 in investments at year end that is invested in the Local Government
Investment Pool. Of the $4,720,880 noted above $576,916 is considered restricted cash and cash
equivalents as these are invested by NMFA in US Treasury notes. For purposes of cash flows at Exhibit
D-3 ending cash is considered to be cash and cash equivalents, restricted cash and cash equivalents.
Interest Rate Risk – Investments. The Town does not have a formal policy limiting investment maturities
that would help manage its exposure to fair value losses from increasing interest rates.
Concentration of Credit Risk – Investments. For an investment, concentration of credit risk is when any
one issuer is 5% or more of the investment portfolio of the Town. The investments in the New Mexico
LGIP and U.S Treasury Money Market Mutual Funds represent 88% and 12%, respectively, of the
investment portfolio. Since the Town only purchases investments with the highest credit rating, the
additional concentration is not viewed to be an additional risk by the Town. The Town’s policy related
to concentration of credit risk is to comply with the state statute as put forth in the Public Money Act
(Section 6-10-1 to 6-10-63, NMSA 1978).
55
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 3. Deposits and Investments (continued)
Fair Value Measurement
The fair value framework uses a hierarchy that prioritizes the inputs to the valuation techniques used to
measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable
inputs (level 3 measurements). The three levels of the fair value hierarchy are described below:
Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or
liabilities in active markets that the Town has the ability to access.
Level 2 Inputs to the valuation methodology include:
Quoted prices for similar assets or liabilities in active markets.
Quoted prices for identical or similar assets or liabilities in inactive markets.
Inputs other than quoted prices that are observable for the asset or liability.
Inputs that are derived principally from or corroborated by observable market data by
correlation or other means.
If the asset or liability has a specified (contractual) term, the Level 2 input must be
observable for substantially the full term of the asset or liability.
Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value
measurement.
The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the
lowest level of any input that is significant to the fair value measurement. Valuation techniques used
need to maximize the use of observable inputs and minimize the use of unobservable inputs. See above
for discussion of valuation methodologies used to measure fair value of investments.
The valuation methodologies described above may produce a fair value calculation that may not be
indicative of net realizable value or reflective of future fair values. Furthermore, while the Town
believes its valuation methods are appropriate and consistent with other market participants, the use of
different methodologies or assumptions to determine the fair value of certain financial instruments
could result in a different fair value measurement at the reporting date.
The following table sets forth by level within the fair value hierarchy, the Town’s assets at fair value as
of June 30, 2018:
Total Level 1 Level 2 Level 3
4,720,880$ 4,720,880$ -$ -$
56
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 3. Deposits and Investments (continued)
Reconciliation to the Statement of Net Position:
Cash and cash equivalents per Exhibit A-1 12,327,117$
Restricted cash and cash equivalents per Exhibit A-1 1,699,748
Cash and investments - Statement of Fiduciary Assets and Liabilities per Exhibit E-1 73,997
Investments per Exhibit A-1 4,008,564
Restricted investments per Exhibit A-1 75,400
Total cash, investments, and cash equivalents 18,184,826
Add: outstanding checks and other reconciling items 1,028,183
Less: NMFA restricted accounts (576,916)
Less: New Mexico Government Local Investment Pool (4,143,964)
Less: petty cash (1,841)
Bank balance of deposits 14,490,288$
57
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 4. Receivables
Governmental receivables as of June 30, 2018 are comprised of the following:
Lodgers' Tax Airport
Special Revenue Construction
General Fund Capital Projects Fund
Taxes receivable:
Property taxes 169,677$ -$ -$
Gross receipts taxes 1,422,886 - -
Franchise taxes 144,722 - -
Lodger's taxes - 120,684 -
Oil and gas taxes 22,674 - -
MVD taxes 273 - -
Total taxes receivable 1,760,232 120,684 -
Due from other governments:
State grants 3,589 21,951 34,564
Taos County - - 11,853
Federal grants - - 97,061
Total due from other governments 3,589 21,951 143,478
Accounts receivable, net 1,763,821$ 142,635$ 143,478$
Other
Governmental
Funds Total
Taxes receivable:
Property taxes -$ 169,677$
Gross receipts taxes 264,900 1,687,786
Franchise taxes - 144,722
Lodger's taxes - 120,684
Oil and gas taxes 15,297 37,971
MVD taxes - 273
Total taxes receivable 280,197 2,161,113
Due from other governments:
State grants 189,261 249,365
Taos County - 11,853
Federal grants - 97,061
Total due from other governments 189,261 358,279
Accounts receivable, net 469,458$ 2,519,392$
In accordance with GASB Statement No. 33, property tax revenues in the amount of $128,886 that were
not collected within the period of availability have been reclassified as unearned revenue in the
governmental fund financial statements as of June 30, 2018.
58
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 4. Receivables (continued)
Business-type activity receivables as of June 30, 2018 are comprised of the following:
Water and Sewer Solid Waste
Taxes receivable
Gross receipts taxes 75,684$ -$
Customer receivable 1,396,556 252,399
Less: allowance for
uncollectable accounts (745,216) (52,602)
Accounts receivable, net 727,024$ 199,797$
Taos Regional
Landfill Total
Taxes receivable
Gross receipts taxes -$ 75,684$
Customer receivable 163,060 1,812,015
Less: allowance for
uncollectable accounts (17,485) (815,303)
Accounts receivable, net 145,575$ 1,072,396$
NOTE 5. Interfund Receivables, Payables, and Transfers
The Town records temporary interfund receivables and payables to cover cash deficits related to
accounts payable. All interfund balances are to be repaid within one year.
Due from other funds Due to other funds Amount
1994 Gross Receipts Tax Revenue Bond
Acquisition General Fund 800$
General Fund
1994 Gross Receipts Tax Revenue Bond
Acquisition 15,927
General Fund Community Grants 21,171
General Fund Water and Sewer 34,872
General Fund Solid Waste 3,464
General Fund Taos Regional Landfill 5,974
Total 82,208$
59
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 5. Interfund Receivables, Payables, and Transfers
Net operating transfers, made to supplement other funding sources, and capital asset transfers were as
follows:
Transfers Out Transfers In Amount
Fire Protection 2015 NMFA Fire Pumper Loan 75,094$
Lodger's Tax Fund Lodger's Tax Promotional 793,820
Lodger's Tax Fund Public Transportation 197,205
General Fund Community Grants 47,308
Municipal Road Gas Tax 2011 PPRF Street Improvement 65,494
General Fund 2011 PPRF Street Improvement 121,509
2007 NMFA Land Purchase 2011 PPRF Street Improvement 386
2011 PPRF Street Improvement Reserve 2011 PPRF Street Improvement 3,857
Municipal Road Gas Tax 1999 Gas Tax Fund 46,503
1/4 cent Municipal Gross Receipts Tax Capital Projects Fund 28,000
1/4 cent Municipal Gross Receipts Tax
2009 NMFA PPRF Disadvantage
Program Eco Park 180,753
1/4 cent Municipal Gross Receipts Tax
2008 GRT Revenue Bond Retirement
Fund 551,825
1/4 cent Municipal Gross Receipts Tax 1999 Gas Tax Fund 155,596
Facilities Improvement Fund General Fund 200,000
General Fund Capital Projects Fund 226,576
General Fund Capital Maintenance Operating Fund 1,111,448
General Fund Vehicle Replacement Fund 50,000
General Fund 1999 Gas Tax Fund 16,183
Capital Projects Fund 1999 Gas Tax Fund 784,000
General Fund General Fund 5,256,860
Water and Sewer Water and Sewer 3,939,071
Taos Regional Landfill Taos Regional Landfill 1,553,172
Total 15,404,660$
60
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 6. Capital Assets
The following is a summary of capital assets and changes occurring during the year ended June 30,
2018. Land and construction in progress are not subject to depreciation.
Balance
June 30, 2017 Additions
Deletions and
Transfers
Balance
June 30, 2018
Capital assets not being
Land 6,258,729$ 356,559$ -$ 6,615,288$
Construction in progress 20,868,627 50,103 20,549,120 369,610
Total not being depreciated 27,127,356 406,662 20,549,120 6,984,898
Capital assets being depreciated:
Land improvements 7,461,945 - - 7,461,945
Buildings and improvements 34,834,677 803,218 - 35,637,895
Machinery and Equipment 15,762,340 430,915 21,968 16,171,287
Infrastructure 57,424,391 26,195,966 - 83,620,357
Total being depreciated 115,483,353 27,430,099 21,968 142,891,484
Total capital assets 142,610,709 27,836,761 20,571,088 149,876,382
Accumulated depreciation:
Land improvements 5,072,807 242,800 - 5,315,607
Buildings and improvements 18,907,920 1,103,226 - 20,011,146
Machinery and Equipment 13,296,694 548,697 21,968 13,823,423
Infrastructure 41,355,438 2,583,631 - 43,939,069
Total accumulated depreciation 78,632,859 4,478,354 21,968 83,089,245
Capital assets, net 63,977,850$ 23,358,407$ 20,549,120$ 66,787,137$
Depreciation expense for the year ended June 30, 2018 was charged to the functions of the
governmental activities as follows:
General 4,075,301$
Public safety 89,568
Public works 313,485
Total 4,478,354$
61
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 6. Capital Assets (continued)
Business‐type Activities:
Balance
June 30, 2017 Additions
Deletions and
Transfers
Balance
June 30, 2018
Capital assets not being
Land 262,422$ -$ -$ 262,422$
Construction in progress 455,434 21,447 455,434 21,447
Total not being depreciated 717,856 21,447 455,434 283,869
Capital assets being depreciated:
Land improvements 104,895 - - 104,895
Buildings and improvements 4,656,981 - - 4,656,981
Machinery and Equipment 9,119,257 527,697 - 9,646,954
Infrastructure 37,774,106 608,558 - 38,382,664
Total being depreciated 51,655,239 1,136,255 - 52,791,494
Total capital assets 52,373,095 1,157,702 455,434 53,075,363
Accumulated depreciation:
Land improvements 95,947 676 - 96,623
Buildings and improvements 2,892,528 143,311 - 3,035,839
Machinery and Equipment 7,728,286 280,255 - 8,008,541
Infrastructure 14,667,001 1,591,154 - 16,258,155
Total accumulated depreciation 25,383,762 2,015,396 - 27,399,158
Capital assets, net 26,989,333$ (857,694)$ 455,434$ 25,676,205$
Depreciation expense for the year ended June 30, 2018 was charged to the proprietary funds as follows:
Water and Sewer 1,664,136$
Solid Waste 61,735
Taos Regional Landfill 289,525
Total 2,015,396$
62
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 7. Long‐term Debt
During the year ended June 30, 2018, the following changes occurred in the liabilities reported in the
government-wide statement of net position:
Governmental Activities:Balance
June 30,
2017 Additions Retirements
Balance
June 30,
2018
Due Within
One Year
Revenue Bonds 4,060,000$ -$ 385,000$ 3,675,000$ 400,000$
NMFA Loans 2,371,923 - 368,231 2,003,692 377,252
Compensated Absences 610,922 393,998 328,626 676,294 328,626
Total 7,042,845$ 393,998$ 1,081,857$ 6,354,986$ 1,105,878$
Revenue Bonds
At June 30, 2018, the Town had one revenue bond outstanding. For the Series 2008 Gross Receipts Tax
Revenue Bonds, the Town pledged revenues from the State-Shared Gross Receipts Tax revenues. The
revenue bonds are as follows:
Description Date of Issue Due Date Interest Rate
Original
Amount of
Issue
Series 2008 Gross Receipts Tax 1/30/2008 6/1/2026 4.00-5.00% 6,395,000$
The annual requirements to amortize the revenue bond as of June 30, 2018, including interest
payments, are as follows:
2019 400,000$ 151,374$ 551,374$
2020 415,000 135,375 550,375
2021 430,000 118,775 548,775
2022 450,000 101,145 551,145
2023 465,000 82,695 547,695
2024-2026 1,515,000 128,940 1,643,940
Total 3,675,000$ 718,304$ 4,393,304$
Fiscal Year
Ending June 30, Principal Interest
Total Debt
Service
63
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 7. Long‐term Debt (continued)
NMFA Loans
The Town entered into three loan agreements with the New Mexico Finance Authority, wherein the
Town pledged revenue derived from State-Shared Gross Receipts Tax and the Fire to cover debt service.
Aside from the NMFA Fire Truck Pumper loan, this revenue is not subject to intercept agreements. The
NMFA loans are as follows:
Description Date of Issue Due Date Interest Rate
Original
Amount of
Issue
NMFA Phase I Multi-Phase Eco Park 11/25/2009 5/1/2025 .62-3.67% 2,213,469$
NMFA Revolving Loan Fund
Road Projects 11/4/2011 5/1/2022 1.90% 1,694,457$
NMFA Fire Truck Pumper Loan 5/8/2015 5/1/2021 0.92%434,994$
The annual requirements to amortize the NMFA loans as of June 30, 2018, including interest payments,
are as follows:
2019 377,252$ 53,801$ 431,053$
2020 387,381 45,952 433,333
2021 398,774 36,964 435,738
2022 334,977 28,099 363,076
2023 162,665 18,091 180,756
2024-2025 342,643 18,869 361,512
Total 2,003,692$ 201,776$ 2,205,468$
Fiscal Year
Ending June 30, Principal Interest
Total Debt
Service
Compensated Absences‐ Employees of the Town are able to accrue a limited amount of vacation and
other compensatory time during the year. During fiscal year June 30, 2018, government-wide
compensated absences increased $65,372 from the prior year accrual. Compensated absences are
liquidated by the respective funds in which they are accrued.
64
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 7. Long‐term Debt (continued)
Proprietary Funds:
The proprietary funds have incurred various forms of debt which were used for the purposes of
constructing, expanding, repairing and making improvements to its property, plant and equipment. The
following schedule shows the changes to its various forms of debt during the fiscal year ended June 30,
2018:
Business‐type Activities:Balance
June 30,
2017 Additions Retirements
Balance
June 30,
2018
Due Within
One Year
Revenue Bonds 1,798,600$ -$ 141,000$ 1,657,600$ 60,000$
NMFA and RUS Loans 3,400,961 - 677,304 2,723,657 277,651
Landfill closure and postclosure 1,698,330 14,600 - 1,712,930 -
Compensated Absences 85,016 72,253 60,833 96,436 60,833
Total 6,982,907$ 86,853$ 879,137$ 6,190,623$ 398,484$
Revenue Bonds
At June 30, 2018, the Town had the following revenue bonds outstanding:
Description Date of Issue Due Date Interest Rate
Original
Amount of
Issue
Series 1993A Water and Sewer 3/16/1993 3/16/1933 5.63%635,600$
Series 1993B Water and Sewer 3/16/1993 3/16/1933 5.50%123,000$
Series 1995A Water and Sewer 12/5/1995 12/5/1935 5.13% 1,315,000$
Series 1998A Water and Sewer 7/1/1999 1/1/1938 4.75%475,000$
The annual requirements to amortize the NMFA loans as of June 30, 2018, including interest payments,
are as follows:
2019 60,000$ 85,663$ 145,663$
2020 63,000 82,535 145,535
2021 66,000 79,254 145,254
2022 70,000 58,211 128,211
2023 73,000 72,164 145,164
2024-2028 427,000 299,493 726,493
2029-2034 552,600 175,751 728,351
2035-2039 321,000 44,024 365,024
2040 25,000 1,188 26,188
Total 1,657,600$ 898,283$ 2,555,883$
Fiscal Year
Ending June 30, Principal Interest
Total Debt
Service
65
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 7. Long‐term Debt (continued)
NMFA and USDA Loans
The Town entered into loan agreements with the New Mexico Finance Authority and USDA. These loans
are not subject to intercept agreements. The loans are as follows:
Description Date of Issue Due Date Interest Rate
Original
Amount of
Issue
RUS Series 2000A Water & Sewer 12/18/2000 12/18/2040 5.00%250,000$
NMFA Series 2001A Water & Sewer 5/11/2001 5/1/2021 4.16-5.41% 950,391$
NMFA Series 2008A Landfill 4/11/2008 5/1/2018 2.72-3.58% 1,000,000$
NMFA/WTB Water Project Fund Loan 9/11/2009 6/1/2029 0.00%130,000$
NMFA/WTB Water Project Fund Loan 9/11/2009 6/1/2029 0.00%600,000$
NMED/ARRA Water State Revolving
Fund Loan 11/23/2009 6/30/2030 0.00% 1,200,000$
NMFA/WTB Water Project Fund Loan 4/19/2013 6/1/2033 0.00%197,390$
NMFA New Cell for Lanfill Facility Loan 8/28/2015 6/1/2025 0.38-2.24% 1,376,046$
The annual requirements to amortize the loans as of June 30, 2018, including interest payments are as
follows:
2019 277,651$ 20,160$ 297,811$
2020 280,122 18,000 298,122
2021 283,095 15,312 298,407
2022 286,596 12,108 298,704
2023 290,603 8,388 298,991
2024-2028 917,412 4,272 921,684
2028-2032 388,178 - 388,178
Total 2,723,657$ 78,240$ 2,801,897$
Fiscal Year
Ending June 30, Principal Interest
Total Debt
Service
Compensated Absences – Employees of the Town are able to accrue a limited amount of vacation and
other compensatory time during the year. During fiscal year June 30, 2018, business-type compensated
absences increased $11,420 from the previous year accrual. Compensated absences are liquidated by
the respective funds in which they are accrued
66
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 8. Risk Management
The Town is exposed to various risks of loss related to torts, theft of, damage to, and destruction of
assets; errors and omissions; injuries and natural disasters. The Town is a member and is insured
through the New Mexico Town Insurance Authority. The Authority was created to provide
comprehensive core insurance programs by expanding the pool of subscribers to maximize cost
containment opportunities for required insurance coverage. The Authority acts as the common carrier
for the State of New Mexico cities. The Town pays an annual premium to the Authority based on claim
experience and the status of the pool. The Risk Management Program includes Workers Compensation,
General and Automobile Liability, Automobile Physical Damage, and Property and Crime coverage. The
Town is not liable for more than the premiums paid. The Town has not had any insurance settlements
that exceeded insurance coverage amounts in the preceding three fiscal years.
NOTE 9. Other Required Individual Fund Disclosures
Generally accepted accounting principles require disclosures of certain information concerning
individual funds including:
A. Deficit fund balance of individual funds. The following fund had a deficit fund balance for the
year ended June 30, 2018:
Civic Center $(2,323)
B. Excess of expenditures over appropriations. There were no funds in which fund expenditures
were in excess of the budgeted appropriations for the year ended June 30, 2018.
C. Designated cash appropriations in excess of available balances. There were no funds with
designated cash appropriation in excess of available balances for the year ended June 30, 2018.
NOTE 10. Pension Plan – Public Employee Retirement Association of NM
Public Employees Retirement Fund is a cost-sharing, multiple employer defined benefit pension plan.
This fund has six divisions of members, including State General, State Police/Adult Correction Officers,
Municipal General, Municipal Police/Detention Officers, Municipal Fire, and State Legislative Divisions,
and offers 24 different types of coverage within the PERA plan. All assets accumulated may be used to
pay benefits, including refunds of member contributions, to any of the plan members or beneficiaries, as
defined by the terms of this plan. Certain coverage plans are only applicable to a specific division.
Eligibility for membership in the Public Employees Retirement Fund is set forth in the Public Employees
Retirement Act (Chapter 10, Article 11, NMSA 1978). Except as provided for in the Volunteer
Firefighters Retirement Act (10-11A-1 to 10-11A-7, NMSA 1978), the Judicial Retirement Act (10-12B-1
to 10-12B-19, NMSA 1978), the Magistrate Retirement Act (10-12C-1 to 10-12C-18, NMSA 1978), and
the Educational Retirement Act (Chapter 22, Article 11, NMSA 1978), each employee and elected official
of every affiliated public employer is required to be a member in the Public Employees Retirement
Fund, unless specifically excluded.
67
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 10. Pension Plan – Public Employee Retirement Association of NM (continued)
Benefits Provided – Benefits are generally available at age 65 with five or Benefits are generally
available at age 65 with five or more years of service or after 25 years of service regardless of age for
TIER I members. Provisions also exist for retirement between ages 60 and 65, with varying amounts of
service required. Certain police and fire members may retire at any age with 20 or more years of service
for Tier I members.
Generally, the amount of retirement pension is based on final average salary, which is defined under
Tier I as the average of salary for the 36 consecutive months of credited service producing the largest
average; credited service; and the pension factor of the applicable coverage plan. Monthly benefits vary
depending upon the plan under which the member qualifies, ranging from 2% to 3.5% of the member’s
final average salary per year of service. The maximum benefit that can be paid to a retiree may not
exceed a range of 60% to 90% of the final average salary, depending on the division. Benefits for duty
and non-duty death and disability and for post-retirement survivors’ annuities are also available.
TIER II
The retirement age and service credit requirements for normal retirement for PERA state and municipal
general members hired increased effective July 1, 2013 with the passage of Senate Bill 27 in the 2013
Legislative Session. Under the new requirements (Tier II), general members are eligible to retire at any
age if the member has at least eight years of service credit and the sum of the member’s age and service
credit equals at least 85 or at age 67 with 8 or more years of service credit. General members hired on
or before June 30, 2013 (Tier I) remain eligible to retire at any age with 25 or more years of service
credit. Under Tier II, police and firefighters in Plans 3, 4 and 5 are eligible to retire at any age with 25 or
more years of service credit. State police and adult correctional officers, peace officers and municipal
juvenile detention officers will remain in 25-year retirement plans, however, service credit will no
longer be enhanced by 20%. All public safety members in Tier II may retire at age 60 with 6 or more
years of service credit. Generally, under Tier II pension factors were reduced by .5%, employee
Contribution increased 1.5 percent and effective July 1, 2014 employer contributions were raised .05
percent. The computation of final average salary increased as the average of salary for 60 consecutive
months.
68
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 10. Pension Plan – Public Employee Retirement Association of NM (continued)
Contributions – See PERA’s compressive annual financial report for Contribution provided description.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions –
PERA Fund Division Municipal General: At June 30, 2018, the Town reported a liability of $6,362,011
for its proportionate share of the net pension liability. The net pension liability was measured as of June
30, 2017, and the total pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of June 30, 2016. The total pension liability was rolled-forward from the valuation
date to the plan year ending June 30, 2017 using generally accepted actuarial principles. Therefore, the
employer’s portion was established as of the measurement date of June 30, 2017.
69
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 10. Pension Plan – Public Employee Retirement Association of NM (continued)
There were no significant events or changes in benefit provision that required an adjustment to the roll-
forward liabilities as of June 30, 2017.
The Town’s proportion of the net pension liability was based on a projection of the Town’s long-term
share of contributions to the pension plan relative to the projected contributions of all participating
entities, actuarially determined. At June 30, 2017, the Town’s proportion was 0.4630 percent, which was
a decrease of 0.0136 percent from its proportion measured as of June 30, 2016.
For the year ended June 30, 2018, the Town recognized pension expense of $550,455. At June 30, 2018,
the Town reported deferred outflows of resources and deferred inflows of resources related to pensions
from the following sources:
Deferred Outflow Deferred Inflow
of Resources of Resources
Changes of assumptions 293,383$ 65,743$
Changes in proportion - 385,069
Difference between expected and actual experience 249,985 325,843
Net difference between projected and actual
earnings on pension plan investments 521,965 -
Town's contributions subsequent to the
measurement date 390,507 -
Total 1,455,840$ 776,655$
$390,507 reported as deferred outflows of resources related to pensions resulting from the Town’s
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended June 30, 2018. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be recognized in pensions expense as follows:
Year ended June 30:
2018 (38,929)$
2019 423,275
2020 56,872
2021 (152,541)
Thereafter -
Total 288,677$
70
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 10. Pension Plan – Public Employee Retirement Association of NM (continued)
PERA Fund Division Municipal Police: At June 30, 2018, The Town reported a liability of $2,707,827
for its proportionate share of the net pension liability. The net pension liability was measured as of June
30, 2017, and the total pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of June 30, 2016. The total pension liability was rolled-forward from the valuation
date to the plan year ending June 30, 2017 using generally accepted actuarial principles. Therefore, the
employer’s portion was established as of the measurement date of June 30, 2017. There were no
significant events or changes in benefit provision that required an adjustment to the roll-forward
liabilities as of June 30, 2017.
The Town’s proportion of the net pension liability was based on a projection of the Town’s long-term
share of contributions to the pension plan relative to the projected contributions of all participating
entities, actuarially determined. At June 30, 2017, the Town’s proportion was 0.4874, which was an
increase of 0.0108 percent from its proportion measured as of June 30, 2016.
For the year ended June 30, 2018, the Town recognized pension expense of $333,962. At June 30, 2018,
The Town reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Deferred Outflow Deferred Inflow
of Resources of Resources
Changes of assumptions 161,107$ 62,966$
Changes in proportion 42,563 24,598
Difference between expected and actual experience 164,460 505,931
Net difference between projected and actual
earnings on pension plan investments 218,078 -
Town's contributions subsequent to the
measurement date 203,663 -
Total 789,871$ 593,495$
$203,663 reported as deferred outflows of resources related to pensions resulting from the Town’s
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended June 30, 2018. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be recognized in pensions expense as follows:
Year ended June 30:
2018 (9,338)$
2019 134,495
2020 (68,681)
2021 (63,763)
Thereafter -
Total (7,287)$
71
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 10. Pension Plan – Public Employee Retirement Association of NM (continued)
PERA Fund Division Municipal Fire: At June 30, 2018, The Town reported a liability of $1,575,114 for
its proportionate share of the net pension liability. The net pension liability was measured as of June 30,
2017, and the total pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of June 30, 2016. The total pension liability was rolled-forward from the valuation
date to the plan year ending June 30, 2017 using generally accepted actuarial principles. Therefore, the
employer’s portion was established as of the measurement date of June 30, 2017. There were no
significant events or changes in benefit provision that required an adjustment to the roll-forward
liabilities as of June 30, 2017.
The Town’s proportion of the net pension liability was based on a projection of the Town’s long-term
share of contributions to the pension plan relative to the projected contributions of all participating
entities, actuarially determined. At June 30, 2017, the Town’s proportion was 0.2753, which was a
decrease of 0.0031 percent from its proportion measured as of June 30, 2016.
For the year ended June 30, 2018, the Town recognized pension expense of $197,783. At June 30, 2018,
The Town reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Deferred Outflow Deferred Inflow
of Resources of Resources
Changes of assumptions 62,271$ 9,875$
Changes in proportion 30,784 12,553
Difference between expected and actual experience 51,430 197,230
Net difference between projected and actual
earnings on pension plan investments 59,128 -
Town's contributions subsequent to the
measurement date 68,705 -
Total 272,318$ 219,658$
$68,705 reported as deferred outflows of resources related to pensions resulting from the Town’s
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended June 30, 2018. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be recognized in pensions expense as follows:
Year ended June 30:
2018 22,524$
2019 22,310
2020 (43,843)
2021 (17,036)
Thereafter -
(16,045)$
72
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 10. Pension Plan – Public Employee Retirement Association of NM (continued)
Actuarial assumptions. The total pension liability in the June 30, 2017 actuarial valuation was
determined using the following significant actuarial assumptions, applied to all periods included in the
measurement:
PERA FUND
PERA
Actuarial valuation date June 30, 2016
Actuarial cost method Entry Age Normal
Amortization method Level Percentage of Pay
Amortization period Solved for based on statutory rates
Asset valuation method 4 Year smoothed Market Value
Actuarial Assumptions:
Investment rate of return 7.51% annual rate, net of investment expense
Projected benefit payment 100 years
Payroll Growth 2.75% for first 9 years, then 3.254% annual rate
Projected salary increases 2.75% to 14.00% annual rate
Includes inflation at 2.25% annual rate first 9 years
2.75% all other years
Mortality Assumption
RP-2000 Mortality Tables (Combined table for healthy post-retirement,
Employee table for active members, and Disabled table for disabled retirees
before retirement age) with projection to 2018 using Scale AA.
Experience Study Dates
July 1, 2008 to June 30, 2013 (demographic) and July 1, 2010 through June 30,
2016 (economic)
The total pension liability, net pension liability, and certain sensitivity information are based on an
actuarial valuation performed as of June 30, 2016. The total pension liability was rolled-forward from
the valuation date to the plan year ended June 30, 2017. These assumptions were adopted by the Board
use in the June 30, 2016 actuarial valuation.
The long-term expected rate of return on pension plan investments was determined using a building-
block method in which best-estimate ranges of expected future real rates of return (expected returns,
net of pension plan investment expense and inflation) are developed for each major asset class. These
ranges are combined to produce the long-term expected rate of return by weighting the expected future
real rates of return by the target asset allocation percentage and by adding expected inflation. The target
allocation and best estimates of arithmetic real rates of return for each major asset class are
summarized in the following table:
Long-Term Expected
Real Rate of Return
Global Equity 7.39%
Risk Reduction & Mitigation 1.79
Credit Oriented Fixed Income 5.77
Real Assets 7.35
Total 100.00%
ALL FUNDS - Asset Class Target Allocation
21.5
15.0
20.00
43.50%
73
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 10. Pension Plan – Public Employee Retirement Association of NM (continued)
Discount rate. A single discount rate of 7.51% was used to measure the total pension liability as of June
30, 2017. This single discount rate was based on a long-term expected rate of return on pension plan
investments of 7.51%, compounded annually, net of expense. Based on the stated assumptions and the
projection of cash flows, the plan’s fiduciary net position and future contributions were projected to be
available to finance all projected future benefit payments of current plan members.
Therefore, the long-term expected rate of return on pension plan investments was applied to all period
of projected benefit payments to determine the total pension liability.
The projections of cash flows used to determine this single discount rate assumed that plan member and
employer contributions will be made at the current statutory levels.
Sensitivity of the Town’s proportionate share of the net pension liability to changes in the discount rate.
The following presents the Town’s proportionate share of the net pension liability calculated using the
discount rate of 7.51 percent, as well as what the Town’s proportionate share of the net pension liability
would be if it were calculated using a discount rate that is 1-percentage-point lower (6.51 percent) or 1-
percentage-point higher (8.51 percent) than the current rate:
PERA Fund Municipal General Division
1% Decrease
(6.51%)
Current
Discount Rate
(7.51%)
1% Increase
(8.51%)
Town's proportionate share of the
net pension liability 9,971,373$ 6,362,011$ 3,360,325$
PERA Fund Municipal Police Division
1% Decrease
(6.48%)
Current
Discount Rate
(7.48%)
1% Increase
(8.48%)
Town's proportionate share of the
net pension liability 4,318,232$ 2,707,827$ 1,386,251$
PERA Fund Municipal Fire Division
1% Decrease
(6.48%)
Current
Discount Rate
(7.48%)
1% Increase
(8.48%)
Town's proportionate share of the
net pension liability 2,111,060$ 1,575,114$ 1,133,445$
Pension plan fiduciary net position. Detailed information about the pension plan’s fiduciary net position
is available in separately issued PERA’S financial reports.
Payables to the pension plan. At June 30, 2018, the Town had payables to the plan in the amount of
$56,230.
74
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 11. Post‐Employment Benefits – State Retiree Health Care Plan
General Information about the OPEB
Plan description. Employees of the Town are provided with OPEB through the Retiree Health Care
Fund (the Fund)—a cost-sharing multiple-employer defined benefit OPEB plan administered by the
New Mexico Retiree Health Care Authority (NMRHCA). NMRHCA was formed February 13, 1990, under
the New Mexico Retiree Health Care Act (the Act) of New Mexico Statutes Annotated, as amended
(NMSA 1978), to administer the Fund under Section 10-7C-1-19 NMSA 1978. The Fund was created to
provide comprehensive group health insurance coverage for individuals (and their spouses, dependents
and surviving spouses) who have retired or will retire from public service in New Mexico.
NMRHCA is an independent agency of the State of New Mexico. The funds administered by NMRHCA are
considered part of the State of New Mexico financial reporting entity and are OPEB trust funds of the
State of New Mexico. NMRHCA’s financial information is included with the financial presentation of the
State of New Mexico.
Benefits provided. The Fund is a multiple employer cost sharing defined benefit healthcare plan that
provides eligible retirees (including terminated employees who have accumulated benefits but are not
yet receiving them), their spouses, dependents and surviving spouses and dependents with health
insurance and prescription drug benefits consisting of a plan, or optional plans of benefits, that can be
contributions to the Fund and by co-payments or out-of-pocket payments of eligible retirees.
Employees covered by benefit terms – At June 30, 2017, the Fund’s measurement date, the following
employees were covered by the benefit terms:
Plan membership
Current retirees and surviving spouses 51,208
Inactive and eligible for deferred benefit 11,478
Current active members 97,349
160,035
Active membership
State general 19,593
State police and corrections 1,886
Municipal general 21,004
Municipal police 3,820
Municipal FTRE 2,290
Educational Retirement Board 48,756
97,349
Contributions – Employer and employee contributions to the Fund total 3% for non-enhanced
retirement plans and 3.75% of enhanced retirement plans of each participating employee’s salary as
required by Section 10-7C-15 NMSA 1978. The contributions are established by statute and are not based
on an actuarial calculation. All employer and employee contributions are non-refundable under any
circumstance, including termination of the employer’s participation in the Fund. Contributions to the
Fund from the Town were $167,557 for the year ended June 30, 2018.
75
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 11. Post‐Employment Benefits – State Retiree Health Care Plan (continued)
OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to OPEB
At June 30, 2018, the Town reported a liability of $5,759,304 for its proportionate share of the net
OPEB liability. The net OPEB liability was measured as of June 30, 2017, and the total OPEB liability
used to calculate the net OPEB liability was determined by an actuarial valuation as of that date. The
Town’s proportion of the net OPEB liability was based on actual contributions provided to the Fund
for the year ending June 30, 2017. At June 30, 2017, the Town’s proportion was 0.12709 percent.
For the year ended June 30, 2018, the Town recognized OPEB expense of $228,971. At June 30, 2018
the Town reported deferred outflows of resources and deferred inflows of resources related to OPEB
from the following sources:
Deferred Outflow Deferred Inflow
of Resources of Resources
Differences between expected and actual experience -$ 221,012$
Net difference between expected and actual
investments on OPEB plan investments - 82,852
Change of assumptions - 1,006,940
Town's contributions subsequent to the measurement date 111,708 -
Total 111,708$ 1,310,804$
Deferred outflows of resources totaling $98,369 represent Town contributions to the Fund made
subsequent to the measurement date and will be recognized as a reduction of net OPEB liability in the
year ending June 30, 2019. Other amounts reported as deferred outflows of resources and deferred
inflows of resources will be recognized in OPEB expense as follows:
2019 (278,686)$
2020 (278,686)
2021 (278,686)
2022 (278,686)
2023 (196,060)
76
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 11. Post‐Employment Benefits – State Retiree Health Care Plan (continued)
Actuarial assumptions. The total OPEB liability was determined by an actuarial valuation using the
following actuarial assumptions:
Valuation Date June 30, 2017
Actuarial cost method Entry age normal, level percent of pay, calculated
on individual employee basis
Asset valuation method Market value of assets
Actuarial assumptions:
Inflation 2.50% for ERB; 2.25% for PERA
Projected payroll increases 3.50%
Investment rate of return 7.25%, net of OPEB plan investment expense
and margin for adverse deviation
including inflation
Health care cost trend rate 8% graded down to 4.5% over 14 years
for Non-Medicare medical plan costs and 7.5% graded
down to 4.5% over 12 for Medicare medical plan costs
Rate of Return. The long-term expected rate of return on OPEB plan investments was determined using
a building-block method in which the expected future real rates of return (net of investment fees and
inflation) are developed for each major asset class. These returns are combined to produce the
long-term expected rate of return by weighting the expected future real rates of return by the target
asset allocation percentage, adding expected inflation and subtracting expected investment expenses
and a risk margin. The target allocation and projected arithmetic real rates of return for each major
asset class, after deducting inflation, but before investment expenses, used in the derivation of the
long-term expected investment rate of return assumptions.
The best estimates for the long-term expected rate of return is summarized as follows:
Asset Class
Long-Term
Rate of Return
U.S. core fixed income 4.1%
U.S. equity - large cap 9.1
Non U.S. - emerging markets 12.2
Non U.S. - developed equities 9.8
Private equity 13.8
Credit and structured finance 7.3
Real estate 6.9
Absolute return 6.1
U.S. equity - small/mid cap 9.1
77
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 11. Post‐Employment Benefits – State Retiree Health Care Plan (continued)
Discount Rate. The discount rate used to measure the Fund’s total OPEB liability is 3.81% as of June
30, 2017. The projection of cash flows used to determine the discount rate assumed that employer
contributions will be made at rates proportional to the actuary determined contribution rates. For this
purpose, employer contributions that are intended to fund benefits of current plan members and their
beneficiaries are included. Projected employer contributions that are intended to fund the service costs
for future plan members and their beneficiaries are not included. Based on those assumptions, the
Fund's fiduciary net position was projected to be available to make all projected future benefit
payments for current plan members through the fiscal year ending June 30, 2028. Thus, the 7.25%
discount rate was used to calculate the net OPEB liability through 2029. Beyond 2029, the index rate
for 20-year, tax exempt general obligation municipal bonds with an average rating of AA/Aa or higher.
Thus, 3.81% is the blended discount rate.
Sensitivity of the net OPEB liability to changes in the discount rate and healthcare cost trend rates.
The following presents the net OPEB liability of the Town, as well as what the Town’s net OPEB liability
would be if it were calculated using a discount rate that is 1-percentage-point lower (2.81 percent) or
1-percentage-point higher (4.81 percent) than the current discount rate:
Current Discount
1% Decrease Rate 1% Increase
(2.81%) (3.81%) (4.81%)Town's proportionate share of the
net OPEB liability 6,985,945$ 5,759,304$ 4,796,892$
The following presents the net OPEB liability of the Town, as well as what the Town’s net OPEB liability
would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or
1-percentage-point higher than the current healthcare cost trend rates:
1% Decrease Rate 1% Increase
Town's proportionate share of the
net OPEB liability 4,898,684$ 5,759,304$ 6,430,373$
Trend Rate Sensitivity Analysis
OPEB plan fiduciary net position. Detailed information about the OPEB plan’s fiduciary net position is
available in NMRHCA’s audited financial statements for the year ended June 30, 2017.
Payable Changes in the Net OPEB Liability. At June 30, 2018, the Town reported a payable of $6,426
for outstanding contributions due to NMRHCA for the year ended June 30, 2018.
78
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 12. Landfill Closure and Post Closure Care Costs
State and Federal laws and regulations require that the Town place a final cover on its landfill site and
perform certain maintenance and monitoring functions at the landfill site for a minimum of thirty years
after closure. In addition to operating expenses related to current activities of the landfill site, an
expense provision and related liability are being recognized based on the future closure and post
closure care costs that will be incurred near or after the date the landfill no longer accepts waste. The
recognition of these landfill closure and post-closure care costs is based on the amount of the landfill
used during the year. The estimated liability for landfill closure and post closure care costs is $1,712,930
as of June 30, 2018, which is based on 45 percent usage (filled) of the landfill. The estimate has
remained unchanged from the prior year as no significant construction occurred or changes to the site
conditions. The estimated total current cost of the landfill closure and post closure care is based on the
amount that would be paid if all equipment, facilities, and services required to close, monitor, and
maintain the landfill were acquired as of June 30, 2017. However, the actual cost of closure and post
closure care may be higher due to inflation, changes in technology, or changes in landfill laws and
regulations. In addition, the Town is required by State and Federal laws and regulations to make annual
contributions to finance closure and post closure care. The Town is in compliance with these
requirements, and at June 30, 2018 cash of $1,025,418 and investments of $75,400 is part of the pooled
funds held by the Town and is presented as restricted cash on the statement of net position.
NOTE 13. Joint Powers Agreements
Salazar Property and Sports Facilities
Participants Town of Taos, Taos Municipal Schools Board of Education
Responsible party Taos Municipal School District
Description Develop, manage and maintain a multi-purpose athletic
facility on the Salazar property
Term of agreement 40 years from 2009, with option to renew
Amount of project $2,140,012 for Phase I; unknown for other phases
Town contributions $ 180,756 Principal/ Interest- Debt Payment
Audit responsibility Town of Taos
Public Restroom Facility
Participants Town of Taos, County of Taos
Responsible party County of Taos
Description Designing, constructing, operating, and maintaining a public
restroom facility
Term of agreement November 20, 2007 to January 31, 2028
Amount of project Indeterminate
Town contributions Indeterminate
Audit responsibility County of Taos 79
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 13. Joint Powers Agreements (continued)
Enhanced 911‐Response System
Participants Town of Taos, County of Taos, Town of Questa, Village of Taos
Ski Valley, Taos Pueblo
Responsible party County of Taos
Description Provide an answering point for information regarding needed
emergency services
Term of agreement October 19, 2017 until terminated
Amount of project Estimated $973,873 per year
Town contributions $60,000 Fiscal year 2017-2018
Audit responsibility County of Taos
Taos Regional Landfill Board
Participants Town of Taos, County of Taos, Village of Questa, Village of Red
River, Village of Taos Ski Valley
Responsible party Town of Taos
Description Establish the Taos Regional Landfill Board
Term of agreement 50 years from November 2, 2000
Amount of project Dependent on landfill expenses
Town contributions none to date
Audit responsibility Town of Taos
NOTE 14. Contingent Liabilities
The Town is party to various claims and lawsuits arising in the normal course of business. The Town is
insured through the New Mexico Town Insurance Authority. In the opinion of management, the
outcome of these matters will not have a material effect on the financial position of the Town.
In the normal course of operations, the Town receives grant funds from various federal and state
agencies. Amounts received or receivable from grantor agencies are subject to audit and adjustment by
grantor agencies, the purpose of which is to ensure compliance with conditions precedent to the
granting of funds. Any liability for reimbursement which may arise as a result of these audits is not
believed to be material.
80
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 15. Construction and Other Significant Commitments
The Town has committed to pay for several construction contracts that were not completed at June 30,
2018 in the amount of $1,100,026 as follows:
Project Description
Contract Amount
Remaining Contractor
Water Emergency
Water Emergency Project - Well 4 & Well 5 71,919$ Phoenix Mechanical LLC
Water Emergency Project - Well 4 & Well 5 136,184 Alpha Southwest Inc.
Water Emergency Project - Wells 3, 4, 5 & 8 327,466 Miller Engineers, Inc.
NM 68 Utility Relocation Engineering Design 73,039 Miller Engineers, Inc.
Deicing Equipment 149,159 Ground Support Specialist
Tank Replacement and Well House Improvements 264,851 Miller Engineers, Inc.
Engineering/R-O-W Services for Camino del Medio 77,408 Miller Engineers Inc.
1,100,026$
NOTE 16. Prior Period Adjustments
Government Wide Restatements:
The Town has a prior period adjustment for Governmental Activities of ($6,024,242) which was
required for implementation of GASB Statement No. 75. The adjustment reflects a beginning net OPEB
liability of ($6,120,327) and a beginning of deferred outflow of resources- employer contributions
subsequent to the measurement date of $96,085.
The Town has a prior period adjustment for Business-Type Activities of ($816,897) which was required
for implementation of GASB Statement No. 75. The adjustment reflects a beginning net OPEB liability of
($829,926) and a beginning of deferred outflow of resources- employer contributions subsequent to the
measurement date of $9,745.
NOTE 17. Subsequent Events
The date to which events occurring after June 30, 2018, the date of the most recent statement of net
position, have been evaluated for possible adjustment to the financial statements or disclosures is
December 5, 2018 which is the date on which the financial statements were issued. No issues were
noted for disclosure at December 5, 2018.
NOTE 18. Concentrations
The Town depends on financial resources flowing from, or associated with, both the Federal
Government and the State of New Mexico. Because of this dependency, the Town is subject to changes
in specific flows of intergovernmental revenues based on modifications to Federal and State laws and
Federal and State Appropriations.
81
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 19.
NOTE 20.
Restricted Net Position
The government-wide statement of net position reports $6,953,551 of restricted net position, all of
which is restricted by enabling legislation. For descriptions of the related enabling legislation for special
revenue and capital projects funds see pages 47-48 and 104-107.
Utility Revenues Pledged
The Town of Taos has pledged future revenues from the water and sewer system, net of operation and
maintenance expenses, to repay $635,600 in Series 1993A Water & Sewer Revenue Bonds, issued in
1993. The bonds are payable solely from utility customer net revenues and are payable through March
2033. The pledged revenues shall be in an amount sufficient to pay principal, premium, if any, interest
and other amounts due under the bond agreement, including an amount sufficient to cure any
deficiencies in the debt service account or the bond agreement reserve account, to the USDA or the
Trustee, as its assignee, to be deposited in the debt service reserve account or the bond agreement
reserve account held by the trustee, payable from and constituting a lien upon the pledged revenues.
The total principal and interest remaining to be paid on the bonds is $404,600 and $187,711,
respectively. Principal and interest paid for the current year and total customer net revenues were
$40,715 and $3,626,432, respectively.
The Town of Taos has pledged future revenues from the water and sewer system, net of operation and
maintenance expenses, to repay $1,315,000 in Series 1995A Water & Sewer Revenue Bonds, issued in
1995.The bonds are payable solely from utility customer net revenues and are payable through
December 2035.The pledged revenues shall be in an amount sufficient to pay principal, premium, if any,
interest and other amounts due under the bond agreement, including an amount sufficient to cure any
deficiencies in the debt service account or the bond agreement reserve account, to the USDA or the
Trustee, as its assignee, to be deposited in the debt service reserve account or the bond agreement
reserve account held by the trustee, payable from and constituting a lien upon the pledged revenues.
The total principal and interest remaining to be paid on the bonds is $871,000 and $500,665,
respectively. Principal and interest paid for the current year and total customer net revenues were
$77,816 and $3,626,432, respectively.
The Town of Taos has pledged future revenues from the water and sewer system, net of operation and
maintenance expenses, to repay $475,000 in Series 1998A Water & Sewer Revenue Bonds, issued in
1999.The bonds are payable solely from utility customer net revenues and are payable through January
2038.The pledged revenues shall be in an amount sufficient to pay principal, premium, if any, interest
and other amounts due under the bond agreement, including an amount sufficient to cure any
deficiencies in the debt service account or the bond agreement reserve account, to the USDA or the
Trustee, as its assignee, to be deposited in the debt service reserve account or the bond agreement
reserve account held by the trustee, payable from and constituting a lien upon the pledged revenues.
The total principal and interest remaining to be paid on the bonds is $350,000 and $209,705
respectively. Principal and interest paid for the current year and total customer net revenues were
$27,100 and $3,626,432, respectively.
The Town of Taos has pledged future revenues from the Taos Wastewater project, net of operation and
maintenance expenses, to repay $130,000 in NMFA/WTB Water Project, issued in 2009. The loans are
payable solely from utility customer net revenues and are payable through June 2029. The pledged
revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other amounts
due under the loan agreement, including an amount sufficient to cure any deficiencies in the debt
service account or the loan agreement reserve account, to the NMFA or the Trustee, as its assignee, to be
deposited in the debt service reserve account or the loan agreement reserve account held by the trustee,
payable from and constituting a lien upon the pledged revenues. The total principal remaining to be paid 82
STATE OF NEW MEXICO
Town of Taos
Notes to the Financial Statements
June 30, 2018
NOTE 20. Utility Revenues Pledged (continued)
on the loan is $79,862 with no interest due. Principal for the current year and total customer net
revenues were $6,548 and $3,626,432, respectively.
The Town of Taos has pledged future revenues from the Taos Wastewater project, net of operation and
maintenance expenses, to repay $600,000 in NMFA/WTB Water Project, issued in 2009. The loans are
payable solely from utility customer net revenues and are payable through June 2029. The pledged
revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other amounts
due under the loan agreement, including an amount sufficient to cure any deficiencies in the debt
service account or the loan agreement reserve account, to the NMFA or the Trustee, as its assignee, to be
deposited in the debt service reserve account or the loan agreement reserve account held by the trustee,
payable from and constituting a lien upon the pledged revenues. The total principal remaining to be paid
on the loan is $73,298 with no interest due. Principal for the current year and total customer net
revenues were $6,564 and $3,626,432, respectively.
The Town of Taos has pledged future revenues from the Taos Wastewater project, net of operation and
maintenance expenses, to repay $1,200,000 in NMED Clean Water State Revolving Fund Project, issued
in 2009. The loans are payable solely from utility customer net revenues and are payable through June
2030. The pledged revenues shall be in an amount sufficient to pay principal, premium, if any, interest
and other amounts due under the loan agreement, including an amount sufficient to cure any
deficiencies in the debt service account or the loan agreement reserve account, to the NMED or the
Trustee, as its assignee, to be deposited in the debt service reserve account or the loan agreement
reserve account held by the trustee, payable from and constituting a lien upon the pledged revenues.
The total principal remaining to be paid on the loan is $900,000 with no interest due. Principal for the
current year and total customer net revenues were $60,000 and $3,626,432, respectively.
The Town of Taos has pledged future revenues from the Taos Wastewater project, net of operation and
maintenance expenses, to repay $197,390 in NMFA/WTB Water Project, issued in 2013. The loans are
payable solely from utility customer net revenues and are payable through June 2033. The pledged
revenues shall be in an amount sufficient to pay principal, premium, if any, interest and other amounts
due under the loan agreement, including an amount sufficient to cure any deficiencies in the debt
service account or the loan agreement reserve account, to the NMFA or the Trustee, as its assignee, to be
deposited in the debt service reserve account or the loan agreement reserve account held by the trustee,
payable from and constituting a lien upon the pledged revenues. The total principal remaining to be paid
on the loan is $149,006 with no interest due. Principal for the current year and total customer net
revenues were $9,737 and $3,626,432, respectively.
The Town of Taos has pledged future revenues from the New Cell for Landfill Facility, net of operation
and maintenance expenses, to repay $1,376,046 in NMFA loan issued 2015. The loans are payable solely
from utility customer net revenues and are payable through June 2025. The pledged revenues shall be in
an amount sufficient to pay principal, premium, if any, interest and other amounts due under the loan
agreement, including an amount sufficient to cure any deficiencies in the debt service account or the
loan agreement reserve account, to the NMFA or the Trustee, as its assignee, to be deposited in the debt
service reserve account or the loan agreement reserve account held by the trustee, payable from and
constituting a lien upon the pledged revenues. The total principal and interest remaining to be paid on
the loan is $1,263,052 and $78,240, respectively. Principal for the current year and total customer net
revenues were $71,890 and $1,398,245, respectively.
83
Page Left Intentionally Blank
84
R EQUIRED SUPPLEMENTARY INFORMATION
85
2018
Measurement
Date (As of and
for the year
ended
June 30, 2017)
2017
Measurement
Date (As of and
for the year
ended
June 30, 2016)
0.4630%0.4710%
Town of Taos's proportionate share of the net pension liability 6,362,011$ 7,524,994$
3,909,077$ 4,069,174$
162.75% 184.93%
Plan fiduciary net position as a percentage of the total pension liability 73.74%69.18%
Town of Taos's proportion of the net pension liability
Town of Taos's covered payroll
Town of Taos's proportionate share of the net pension liability as a percentage
of its covered payroll
* The amounts presented were determined as of June 30. This schedule is presented to illustrate the requirement to
show information for 10 years. However, until a full 10-year trend is compiled, Town of Taos will present information
for those years for which information is available.
STATE OF NEW MEXICO
Town of Taos
Schedule of the Town's Proportionate Share of the Net Pension Liability
of PERA Fund Municipal General Division
Public Employees Retirement Association (PERA) Plan
Last 10 Fiscal Years*
See independent auditors' report.
See notes to required supplementary information.86
Schedule A-1
Page 1 of 2
2016
Measurement
Date (As of and
for the year
ended
June 30, 2015)
2015
Measurement
Date (As of and
for the year
ended
June 30, 2014)
0.5054%0.5476%
5,152,991$ 4,271,868$
4,513,593$ 4,457,324$
114.17%95.84%
76.99%81.29%
See independent auditors' report.
See notes to required supplementary information.87
2018
Measurement
Date (As of and
for the year
ended
June 30, 2017)
2017
Measurement
Date (As of and
for the year
ended
June 30, 2016)
Town of Taos's proportion of the net pension liability 0.4874%0.4766%
Town of Taos's proportionate share of the net pension liability 2,707,827$ 3,516,497$
Town of Taos's covered payroll 911,949$ 953,345$
Plan fiduciary net position as a percentage of the total pension liability 73.74%69.18%
Town of Taos
Schedule of the Town's Proportionate Share of the Net Pension Liability
of PERA Fund Municipal Police Division
Public Employees Retirement Association (PERA) Plan
Last 10 Fiscal Years*
Town of Taos's proportionate share of the net pension liability as a percentage
of its covered payroll 368.86%296.93%
* The amounts presented were determined as of June 30. This schedule is presented to illustrate the requirement to
show information for 10 years. However, until a full 10-year trend is compiled, Town of Taos will present information
for those years for which information is available.
STATE OF NEW MEXICO
See independent auditors' report.
See notes to required supplementary information.88
Schedule A-1
Page 2 of 2
2016
Measurement
Date (As of and
for the year
ended
June 30, 2015)
2015
Measurement
Date (As of and
for the year
ended
June 30, 2014)
0.4844%0.4887%
2,329,267$ 1,593,109$
949,833$ 937,534$
76.99%81.29%
169.93%245.23%
See independent auditors' report.
See notes to required supplementary information.89
2018
Measurement
Date (As of and
for the year
ended
June 30, 2017)
2017
Measurement
Date (As of and
for the year
ended
June 30, 2016)
Town of Taos's proportion of the net pension liability 0.2753%0.2784%
Town of Taos's proportionate share of the net pension liability 1,575,114$ 1,857,210$
Town of Taos's covered payroll 321,046$ 323,796$
Plan fiduciary net position as a percentage of the total pension liability 73.74%69.18%
STATE OF NEW MEXICO
Town of Taos
Schedule of the Town's Proportionate Share of the Net Pension Liability
of PERA Fund Municipal Fire Division
Public Employees Retirement Association (PERA) Plan
Last 10 Fiscal Years*
Town of Taos's proportionate share of the net pension liability as a percentage
of its covered payroll 490.62% 573.57%
* The amounts presented were determined as of June 30. This schedule is presented to illustrate the requirement to
show information for 10 years. However, until a full 10-year trend is compiled, Town of Taos will present information
for those years for which information is available.
See independent auditors' report.
See notes to required supplementary information.90
Schedule A-1
Page 2 of 2
2016
Measurement
Date (As of and
for the year
ended
June 30, 2015)
2015
Measurement
Date (As of and
for the year
ended
June 30, 2014)
0.2769%0.2567%
1,429,131$ 1,071,464$
315,617$ 285,100$
76.99%81.29%
452.81% 375.82%
See independent auditors' report.
See notes to required supplementary information.91
As of and for the
year ended
June 30, 2018
As of and for the
year ended
June 30, 2017
Contractually required contribution 390,507$ 373,065$
Contributions in relation to the contractually required contribution (390,507) (373,065)
Contribution deficiency (excess)-$-$
Town of Taos’s covered payroll 3,909,401$ 3,909,077$
Contributions as a percentage of covered payroll 9.99%9.54%
Last 10 Fiscal Years*
STATE OF NEW MEXICO
Town of Taos
* The amounts presented were determined as of June 30. This schedule is presented to illustrate the requirement to
show information for 10 years. However, until a full 10-year trend is compiled, Town of Taos will present information
for those years for which information is available.
Schedule of the Town's Contributions
Public Employees Retirement Association (PERA) Plan
PERA Fund Municipal General Division
See independent auditors' report.
See notes to required supplementary information.92
Schedule A-2
Page 1 of 2
As of and for the
year ended
June 30, 2016
As of and for the
year ended
June 30, 2015
386,572$ 428,791$
(386,572) (428,791)
-$ -$
4,069,174$ 4,513,593$
9.50%9.50%
See independent auditors' report.
See notes to required supplementary information.93
As of and for the
year ended
June 30, 2018
As of and for the
year ended
June 30, 2017
Contractually required contribution 203,663$ 161,795$
Contributions in relation to the contractually required contribution (203,663)(161,795)
Contribution deficiency (excess)-$-$
Town of Taos’s covered payroll 1,077,583$ 911,949$
Contributions as a percentage of covered payroll 18.90%17.74%
STATE OF NEW MEXICO
Town of Taos
Schedule of the Town's Contributions
Public Employees Retirement Association (PERA) Plan
PERA Fund Municipal Police Division
* The amounts presented were determined as of June 30. This schedule is presented to illustrate the requirement to
show information for 10 years. However, until a full 10-year trend is compiled, Town of Taos will present information
for those years for which information is available.
Last 10 Fiscal Years*
See independent auditors' report.
See notes to required supplementary information.94
Schedule A-2
Page 2 of 2
As of and for the
year ended
June 30, 2016
As of and for the
year ended
June 30, 2015
169,123$ 168,500$
(169,123)(168,500)
-$ -$
953,345$ 949,833$
17.74%17.74%
See independent auditors' report.
See notes to required supplementary information.95
As of and for the
year ended
June 30, 2018
As of and for the
year ended
June 30, 2017
Contractually required contribution 68,705$69,503$
Contributions in relation to the contractually required contribution (68,705)(69,503)
Contribution deficiency (excess)-$-$
Town of Taos’s covered payroll 317,344$ 321,046$
Contributions as a percentage of covered payroll 21.65%21.65%
Public Employees Retirement Association (PERA) Plan
PERA Fund Municipal Fire Division
Last 10 Fiscal Years*
* The amounts presented were determined as of June 30. This schedule is presented to illustrate the requirement to
show information for 10 years. However, until a full 10-year trend is compiled, Town of Taos will present information
for those years for which information is available.
STATE OF NEW MEXICO
Town of Taos
Schedule of the Town's Contributions
See independent auditors' report.
See notes to required supplementary information.96
Schedule A-2
Page 2 of 2
As of and for the
year ended
June 30, 2016
As of and for the
year ended
June 30, 2015
72,748$ 68,173$
(72,748)(68,173)
-$ -$
336,796$ 315,617$
21.60%21.60%
See independent auditors' report.
See notes to required supplementary information.97
Page Left Intentionally Blank
98
PERA
Changes of benefit terms: The PERA and COLA and retirement eligibility benefits changes in recent years are
described in Note 1 of PERA’s CFAR. https://www.saonm.org
Assumptions: The Public Employ Retirement Association of New Mexico Annual Actuarial Valuations as of
June 2017 report is available at http://www.nmpera.org/
STATE OF NEW MEXICO
Town of Taos
Notes to Required Supplementary Information
For the Year Ended June 30, 2018
See independent auditors' report.
See notes to required supplementary information.99
STATE OF NEW MEXICO Schedule B-1
2018
Measurement
Date (As of and
for the Year
Ended June 30,
2017)
0.12709%
5,759,303$
5,294,121
108.79%
11.34%
* Governmental Accounting Standards Board Statement No. 75 requires ten years of historical
information be presented; however, until a full 10-year trend is compiled, the statement only
requires presentation of information for those years that information is available. Complete
information for Town of Taos is not available prior to fiscal year 2018, the year the statement’s
requirements became effective.
Town of Taos's proportion of the net OPEB liability (asset)
Last 10 Fiscal Years*
Schedule of Proportionate Share of the Net OPEB Liability
Town of Taos
Town of Taos's covered payroll
Town of Taos's proportionate share of the net OPEB liability as
a percentage of its covered payroll
Retiree Health Care OPEB Plan
Plan fiduciary net position as a percentage of the total OPEB
liability
Town of Taos's proportionate share of the net OPEB liability
(asset)
See independent auditors' report.
See notes to required supplementary information.100
STATE OF NEW MEXICO Schedule B-2
As of and for the
Year Ended June
30, 2018
Contractually required contribution 111,708$
111,708
Contribution deficiency (excess)-$
5,250,703
.
2.13%
Notes to Required Supplementary Information
RHC Plan
Changes of benefit provisions : There were no modifications to the benefit provisions as this is the first year of
adoption of the OPEB accounting standard
Change in assumptions and methods: There were no modifications to the assumptions and methods as this is
the first year of adoption of the OPEB accounting standard
* Governmental Accounting Standards Board Statement No. 75 requires ten years of historical information be
presented; however, until a full 10-year trend is compiled, the statement only requires presentation of information for
those years that information is available. Complete information for Town of Taos is not available prior to fiscal year
2018, the year the statement’s requirements became effective.
Town of Taos
Schedule of Contributions
Retiree Health Care OPEB Plan
Last 10 Fiscal Years*
Contribution as a percentage of covered payroll
Contributions in relation to the contractually required contribution
Town of Taos's covered payroll
See independent auditors' report.
See notes to required supplementary information.101
Page Left Intentionally Blank
102
S UPPLEMENTARY INFORMATION
103
STATE OF NEW MEXICO
Town of Taos
Nonmajor Fund Descriptions
June 30, 2018
Special Revenue Funds
Fire Protection –To account for the operations and maintenance of the fire department. Financing is provided by an
allotment from the State of New Mexico Fire Marshall’s Office. State Statute Section 59A-53-2, NMSA, 1978
compilation,requires the allotment be used only to operate fire departments.
Recreation –To account for establishing and maintaining recreational programs in the Town. Financing is provided
by program revenue and by a 1-cent tax on cigarette sales, which is collected and distributed by the State of New
Mexico State Statute Section 7-12-15, NMSA, 1978 compilation requires this tax be used in the above manner.
Local Government Correction –The local government corrections fee fund is used to account for the collection of a
mandatory correction fee for violations of any municipal ordinance. Funds collected can only be used for jailer
training,construction planning, construction, operation and maintenance of a municipal jail, and for paying for costs
of housing.Authority is NMSA 1978 Section 35-14-11B(1).
Law Enforcement Protection –The law enforcement protection fund was created to account for revenues received
pursuant to the law enforcement protection fund (Section 29-13-7, NMSA 1978). Amounts distributed from this fund
may only be expended for the following purposes: (1) the repair and purchase of law enforcement apparatus and
equipment that meet nationally recognized standards; (2) expenses associated with advanced law enforcement
planning and training;(3) complying with match or contribution requirements of federal funds for criminal justice
programs; (4) no more than fifty percent (50%) of the replacement salaries of municipal and county law enforcement
personnel while attending a specified advanced law enforcement planning and training.
Civic Center –To account for that portion of lodgers tax receipts allocated for Civic Center operations and
promotional expenditures, as well as the revenues earned from Civic Center operations, including rentals, catering
fees, and related charges for services. Authority is Town Council resolution.
Domestic Violence Shelter –This fund was created to receive the appropriations and grants for the purpose of
construction and maintaining the Domestic Violence Shelter Home. Authority is Town Council resolution.
Public Transportation –To account for the portion of Lodgers Tax receipts allocated for the purpose of providing
transportation to the public. Authority is Town Council resolution.
Community Grants –To account for various small grants for various community purposes. Each grant is authorized
by the granting agency. The fund is authorized by Town Council resolution.
Municipal Road Gasoline Tax –To account for a 1 cent gasoline tax that is used for repairing and construction of
roads. Also included in this fund is revenue from the State Department of Transportation under a municipal arterial
project agreement. Authority is 7-7-6.9 and 7-1-6.27 NMSA 1978.
1/4 Cent Municipal Gross Receipts Tax –To account for proceeds from a supplemental municipal gross receipts tax,
a portion of which is pledged toward payment of principal and interest on Gross Receipts Tax Revenue Bonds. After
required debt service transfers have been made, the remaining income of this fund is restricted for capital
improvement purposes. NMSA 1978 Chapter 7, Article 20E-1 to 22.
Historical District –To account for all associated parking meter and associated revenues and costs, including leases,
meter maintenance, personnel, and historic district promotion. Authority is Town Council resolution.
Communications –To account for money collected by the Town from three other government entities to share
centralized dispatch services throughout the County of Taos. Funding is authorized by a joint powers agreement as
authorized by Sections 11-1-1 through 11-1-7 NMSA 1978.
104
STATE OF NEW MEXICO
Town of Taos
Nonmajor Fund Descriptions
June 30, 2018
Special Revenue Funds (continued)
Confidential Informant –A structured accounting system, operated within the department, providing officers with
investigative expense monies to support operations related to the detection, investigation or enforcement of the laws
related to crime. This includes but is not limited to: paying documented confidential informants and confidential
sources; purchasing contraband as evidence; and paying expenses for surveillance activities and equipment.
Authority is Town Council resolution.
Capital Maintenance Operating Fund –This fund was created to receive additional amounts that are paid for
onetime costs by the Town of Taos. Authority is Town Council resolution.
Capital Projects Fund
Facilities Improvements –This fund was created to receive transfers from other funds for the purpose of improving
facilities of the Town. Authority is Town Council resolution.
Capital Projects –This fund was created to accumulate revenue and other financing sources for the purpose of
financing general-purpose capital projects. Authority is Town Council resolution.
Vehicle Replacement –This fund was created to receive transfers from other funds for the purpose of purchasing
vehicles for the Town of Taos. Authority is Town Council resolution.
Special Events Enterprise –This fund was created to account for the monies for the special events the Town puts on
throughout the year to generate revenue. Authority is Town Council resolution.
1994 Gross Receipts Tax Revenue Bond Acquisition –This fund was created to receive the 1994 Gross Receipts
Tax Bond proceeds for the purpose of construction of affordable housing. Authority is Town Council resolution.
Debt Service Funds
2015 NMFA Fire Pumper –This fund was created for the purpose of repayment of the bond issued for the new fire
pumper purchased. Authority is Town Council resolution.
2009 NMFA PPRF Disadvantage Program-Eco Park –This fund was created for the purpose of constructing phase I
of a multi-phased recreation park. The repayment under the loan agreement is solely from the first and second
increments of municipal infrastructure gross receipts tax pursuant to section 7-19D-11, NMSA 1978.
2008 Gross Receipts Tax Revenue Bond Retirement –This fund was created for the purpose of repayment of the
bond issue from the 1.225% distribution of State Shared Gross Receipts Tax revenues. Authority is Town Council
resolution.
NMFA Debt Service Reserve Eco Park –This fund was created to be credited with transfers from the General Fund
for the purpose of accumulating monies for payment of principal and interest on the debt for repayment of Eco Park.
Authority is Town Council resolution.
2007 NMFA Land Purchase –This fund was created to be credited with transfers from the General Fund for the
purpose of accumulating monies for payment of principal and interest on the debt for repayment of land purchase.
Authority is Town Council resolution.
2011 PPRF Street Improvement –This fund was created for the purpose of accumulating monies for the payment of
principal and interest on Series PPRF Street Improvement Revenue Bonds. Authority is Town Council resolution.
105
Page Left Intentionally Blank
106
STATE OF NEW MEXICO
Town of Taos
Nonmajor Fund Descriptions
June 30, 2018
Debt Service Funds (continued)
2011 PPRF Street Improvement Reserve –This fund was created for the purpose of accumulating monies for the
payment of principal and interest on Series PPRF Street Improvement Revenue Bonds. Authority is Town Council
resolution.
107
Fire Protection Recreation
Local
Governmental
Correction
Law Enforcement
Protection
Assets
Cash and cash equivalents 367,814$ 19,034$ 45,674$ 1,899$
Investments 223,258 - - -
Receivables:
Taxes receivable - - - -
Due from other governments - - - -
Due from other funds - - - -
Total assets 591,072$ 19,034$ 45,674$ 1,899$
Liabilities
Accounts payable 4,689$ (4)$ 9,300$ 1,899$
Accrued payroll expenses - - - -
Deposits held in trust for others - - - -
Due to other funds - - - -
Total liabilities 4,689 (4) 9,300 1,899
Fund balances
Spendable
Restricted for:
General government - - - -
Public safety 586,383 - 36,374 -
Culture and recreation - 19,038 - -
Health and welfare - - - -
Transportation and roads - - - -
Capital improvements - - - -
Debt service - - - -
Committed to:
General government - - - -
Public safety - - - -
Culture and recreation - - - -
Transportation and roads - - - -
Capital improvements - - - -
Unassigned - - - -
Total fund balances 586,383 19,038 36,374 -
Total liabilities and fund balances 591,072$ 19,034$ 45,674$ 1,899$
Special Revenue
STATE OF NEW MEXICO
June 30, 2018
Combining Balance Sheet
Nonmajor Governmental Funds
Town of Taos
See independent auditors' report.108
Statement A-1
Page 1 of 3
Civic Center
Domestic
Violence Shelter
Public
Transportation
Community
Grants
Municipal Road
Gasoline Tax
780$ 1$ 129,020$ -$ -$
2,000 - 210,000 50,000 -
- - - - 15,297
- - - 189,261 -
- - - - -
2,780$ 1$ 339,020$ 239,261$ 15,297$
-$ -$ -$ 101,186$ -$
- - - 3,488 -
5,103 - - - -
- - - 21,171 -
5,103 - - 125,845 -
- - - - -
- - - - -
- - - - -
- 1 - - -
- - - - 15,297
- - - - -
- - - - -
- - - 113,416 -
- - - - -
- - - - -
- - 339,020 - -
- - - - -
(2,323) - - - -
(2,323) 1 339,020 113,416 15,297
2,780$ 1$ 339,020$ 239,261$ 15,297$
Special Revenue
See independent auditors' report.109
1/4 Cent
Municipal Gross
Receipts Tax
Historical
District Communications
Confidential
Informant
Assets
Cash and cash equivalents 133,104$ 25,935$ -$ 9,828$
Investments - - - -
Receivables:
Taxes receivable 151,371 - - -
Due from other governments - - - -
Due from other funds - - - -
Total assets 284,475$ 25,935$ -$ 9,828$
Liabilities
Accounts payable -$ -$ -$ -$
Accrued payroll expenses - - - -
Deposits held in trust for others - - - -
Due to other funds - - - -
Total liabilities - - - -
Fund balances
Spendable
Restricted for:
General government 284,475 - - -
Public safety - - - -
Culture and recreation - - - -
Health and welfare - - - -
Transportation and roads - - - -
Capital improvements - - - -
Debt service - - - -
Committed to:
General government - - - -
Public safety - - - 9,828
Culture and recreation - 25,935 - -
Transportation and roads - - - -
Capital improvements - - - -
Unassigned - - - -
Total fund balances 284,475 25,935 - 9,828
Total liabilities and fund balances 284,475$ 25,935$ -$ 9,828$
Special Revenue
STATE OF NEW MEXICO
Town of Taos
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2018
See independent auditors' report.110
Statement A-1
Page 2 of 3
Special Revenue
Capital
Maintenance
Operating Fund
Facilities
Improvements Capital Projects
Vehicle
Replacement
Special Events
Enterprise
926,903$ 320,855$ 83,208$ 70,847$ 72,275$
- - 295,923 26,000 190,000
- - 113,529 - -
- - - - -
- - - - -
926,903$ 320,855$ 492,660$ 96,847$ 262,275$
47,042$ -$ 999$ -$ -$
- - - - -
- - - - -
- - - - -
47,042 - 999 - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - - 262,275
- - - - -
- - - - -
- - - - -
- - - - -
- - - -
879,861 320,855 491,661 96,847 -
- - - - -
879,861 320,855 491,661 96,847 262,275
926,903$ 320,855$ 492,660$ 96,847$ 262,275$
Capital Projects
See independent auditors' report.111
Capital Projects
1994 Gross
Receipts Tax
Revenue Bond
Acquisition
2015 NMFA
Fire Pumper
2009 NMFA PPRF
Disadvantage
Program- Eco
Park
2008 Gross
Receipts Tax
Revenue Bond
Retirement
Assets
Cash and cash equivalents 94,284$ -$ 210$ 51$
Investments 429,751 - - -
Receivables:
Taxes receivable - - - -
Due from other governments - - - -
Due from other funds 800 - - -
Total assets 524,835$ -$ 210$ 51$
Liabilities
Accounts payable 138$ -$ -$ -$
Accrued payroll expenses - - - -
Deposits held in trust for others - - - -
Due to other funds 15,927 - - -
Total liabilities 16,065 - - -
Fund balances
Spendable
Restricted for:
General government - - - -
Public safety - - - -
Culture and recreation - - - -
Health and welfare - - - -
Transportation and roads - - - -
Capital improvements 508,770 - - -
Debt service - - 210 51
Committed to:
General government - - - -
Public safety - - - -
Culture and recreation - - - -
Transportation and roads - - - -
Capital improvements - - - -
Unassigned - - - -
Total fund balances 508,770 - 210 51
Total liabilities and fund balances 524,835$ -$ 210$ 51$
STATE OF NEW MEXICO
Town of Taos
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2018
Debt Service
See independent auditors' report.112
Statement A-1
Page 3 of 3
NMFA Debt
Service Reserve
Eco Park
2007 NMFA Land
Purchase
2011 PPRF Street
Improvement
2011 PPRF Street
Improvement
Reserve
Total Nonmajor
Governmental
Funds
192,677$ -$ 33,794$ 170,371$ 2,698,564$
- - - - 1,426,932
- - - - 280,197
- - - - 189,261
- 800
192,677$ -$ 33,794$ 170,371$ 4,595,754$
-$ -$ -$ -$ 165,249$
- - - - 3,488
- - - - 5,103
- - - - 37,098
- - - - 210,938
- - - - 284,475
- - - - 622,757
- - - - 19,038
- - - - 1
- - - - 15,297
- - - - 771,045
192,677 - 33,794 170,371 397,103
- - - - 113,416
- - - - 9,828
- - - - 25,935
- - - - 339,020
- - - - 1,789,224
- - - - (2,323)
192,677 - 33,794 170,371 4,384,816
192,677$ -$ 33,794$ 170,371$ 4,595,754$
Debt Service
See independent auditors' report.113
Fire Protection Recreation
Local
Governmental
Correction
Law Enforcement
Protection
Revenues
Taxes:
Gross receipts -$ -$ -$ -$
Gasoline and motor vehicle - - - -
Intergovernmental:
Federal operating grants - - - -
Federal capital grants - - - -
State operating grants 329,561 - - 29,600
State capital grants - - - -
Charges for services - - 59,190 -
Licenses and fees - - 16,208 -
Investment income 311 - - -
Miscellaneous - - - -
Total revenues 329,872 - 75,398 29,600
Expenditures
Current:
General government - - - -
Public safety 108,941 - 94,289 30,864
Public works - - - -
Culture and recreation - - - -
Capital outlay 9,671 - - -
Debt service:
Principal - - - -
Interest - - - -
Total expenditures 118,612 - 94,289 30,864
Excess (deficiency) of revenues over
expenditures 211,260 - (18,891) (1,264)
Other financing sources (uses)
Transfers in - - - -
Transfers (out)(75,094) - - -
Total other financing sources (uses)(75,094) - - -
Net change in fund balances 136,166 - (18,891) (1,264)
Fund balances - beginning of year 450,217 19,038 55,265 1,264
Fund balances - end of year 586,383$ 19,038$ 36,374$ -$
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
STATE OF NEW MEXICO
Town of Taos
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Special Revenue
See independent auditors' report.114
Statement A-2
Page 1 of 3
Civic Center
Domestic
Violence Shelter
Public
Transportation
Community
Grants
Municipal Road
Gasoline Tax
-$ -$ -$ -$ -$
- - - - 109,769
- - - 730,489 -
- - - - -
- - - 36,167 -
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - 766,656 109,769
- - - 832,890 -
- - - - -
- - - - -
- - 19,600 - -
- - 356,559 750 -
- - - - -
- - - - -
- - 376,159 833,640 -
- - (376,159) (66,984) 109,769
- - 197,205 47,308 -
- - - - (111,997)
- - 197,205 47,308 (111,997)
- - (178,954) (19,676) (2,228)
(2,323) 1 517,974 133,092 17,525
(2,323)$ 1$ 339,020$ 113,416$ 15,297$
Special Revenue
See independent auditors' report.115
1/4 Cent
Municipal Gross
Receipts Tax
Historical
District Communications
Confidential
Informant
Revenues
Taxes:
Gross receipts 975,641$ -$ -$ -$
Gasoline and motor vehicle - - - -
Intergovernmental:
Federal operating grants - - - -
Federal capital grants - - - -
State operating grants - - - -
State capital grants - - - -
Charges for services - - - -
Licenses and fees - 117,670 - -
Investment income - - - -
Miscellaneous - - - -
Total revenues 975,641 117,670 - -
Expenditures
Current:
General government - - - -
Public safety - - - -
Public works - - - -
Culture and recreation - 118,884 - -
Capital outlay - 35,000 - -
Debt service:
Principal - - - -
Interest - - - -
Total expenditures - 153,884 - -
Excess (deficiency) of revenues over
expenditures 975,641 (36,214) - -
Other financing sources (uses)
Transfers in - - - -
Transfers (out)(916,174) - - -
Total other financing sources (uses)(916,174) - - -
Net change in fund balances 59,467 (36,214) - -
Fund balances - beginning of year 225,008 62,149 - 9,828
Fund balances - end of year 284,475$ 25,935$ -$ 9,828$
Town of Taos
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
STATE OF NEW MEXICO
Special Revenue
For the Year Ended June 30, 2018
See independent auditors' report.116
Statement A-2
Page 2 of 3
Special Revenue
Capital
Maintenance
Operating Fund
Facilities
Improvements Capital Projects
Vehicle
Replacement
Special Events
Enterprise
-$ -$ 731,731$ -$
- - - - -
- - - -
- 574,010 - - -
- 13,267 - - -
- 22,807 - - -
- - - - 8,944
- - - - -
- - 3,792 - -
4,800 - - 19,446 -
4,800 610,084 735,523 19,446 8,944
301,937 - - - 76,159
- - - - -
- - 28,495 - -
- - - - -
144,159 819,717 163,869 - -
- - - - -
- - - - -
446,096 819,717 192,364 - 76,159
(441,296) (209,633) 543,159 19,446 (67,215)
1,111,448 - 254,576 50,000 -
- (200,000) (784,000) - -
1,111,448 (200,000) (529,424) 50,000 -
670,152 (409,633) 13,735 69,446 (67,215)
209,709 730,488 477,926 27,401 329,490
879,861$ 320,855$ 491,661$ 96,847$ 262,275$
Capital Projects
See independent auditors' report.117
Capital Projects
1994 Gross
Receipts Tax
Revenue Bond
Acquisition
2015 NMFA Fire
Pumper
2009 NMFA PPRF
Disadvantage
Program- Eco
Park
2008 Gross
Receipts Tax
Revenue Bond
Retirement
Revenues
Taxes:
Gross receipts -$ -$ -$ -$
Gasoline and motor vehicle - - - -
Intergovernmental:
Federal operating grants - - - -
Federal capital grants - - - -
State operating grants - - - -
State capital grants - - - -
Charges for services - - - -
Licenses and fees - - - -
Investment income 6,890 - - -
Miscellaneous 11,000 - - -
Total revenues 17,890 - - -
Expenditures
Current:
General government - 292 - -
Public safety - - - -
Public works - - - -
Culture and recreation - - - -
Capital outlay 18,532 - - -
Debt service:
Principal - 72,004 140,919 385,000
Interest - 2,798 39,837 166,775
Total expenditures 18,532 75,094 180,756 551,775
Excess (deficiency) of revenues over
expenditures (642) (75,094) (180,756) (551,775)
Other financing sources (uses)
Transfers in - 75,094 180,753 551,825
Transfers (out)- - - -
Total other financing sources (uses)- 75,094 180,753 551,825
Net change in fund balances (642) - (3) 50
Fund balances - beginning of year 509,412 - 213 1
Fund balances - end of year 508,770$ -$ 210$ 51$
STATE OF NEW MEXICO
Town of Taos
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Debt Service Fund
See independent auditors' report.118
Statement A-2
Page 3 of 3
NMFA Debt
Service Reserve
Eco Park
2007 NMFA Land
Purchase
2011 PPRF Street
Improvement
2011 PPRF Street
Improvement
Reserve
Total Nonmajor
Governmental
Funds
-$ -$ -$ 1,707,372$
- - - - 109,769
- - - 730,489
- - - - 574,010
- - - - 408,595
- - - - 22,807
- - - - 68,134
- - - - 133,878
3,351 - - 2,829 17,173
- - - - 35,246
3,351 - - 2,829 3,807,473
- - - - 1,211,278
- - - - 234,094
- - - - 28,495
- - - - 138,484
- - - - 1,548,257
- - 155,308 - 753,231
- - 18,034 - 227,444
- - 173,342 - 4,141,283
3,351 - (173,342) 2,829 (333,810)
- - 191,246 - 2,659,455
- (386) - (3,857) (2,091,508)
- (386) 191,246 (3,857) 567,947
3,351 (386) 17,904 (1,028) 234,137
189,326 386 15,890 171,399 4,150,679
192,677$ -$ 33,794$ 170,371$ 4,384,816$
Debt Service Fund
See independent auditors' report.119
Page Left Intentionally Blank
120
S UPPORTING SCHEDULES
121
Account Bank Deposits Outstanding Book
Bank Name/Account Name Type Balance in Transit Checks Balance
US Bank
Clearing Account Checking 751,527$ -$ 751,527$ -$
Judicial Bond Fund Municipal Court Checking 1,007 - - 1,007
Utility Construction Fund Checking 39,530 - - 39,530
Water & Sewer System Income Fund Checking 5,982,324 45,499 31,660 5,996,163
Certificate of Deposit- Investment CD - - - -
Total US Bank 6,774,388 45,499 783,187 6,036,700
Centinel Bank
General Fund Checking 6,666,263 2,628 293,123 6,375,768
1994 GRT Revenue Bond Acquisition Fund Checking 95,084 - - 95,084
HUD Account- Domestic Violence Checking 1 - - 1
Water Wastewater Improvements Fund Checking 896,602 - - 896,602
ACH Transfer Account Checking 57,946 - - 57,946
Payroll Clearing Checking 4 - - 4
Total Centinel Bank 7,715,900 2,628 293,123 7,425,405
Bank balance of deposits 14,490,288$ 48,127$ 1,076,310$ 13,462,105$
New Mexico Finance Authority‐Investment
Taos 57 - Debt Service Funds 10,902$ -$ -$ 10,902$
Taos 57 - Debt Service Reserve Funds 181,775 - - 181,775
Taos 42 - Debt Service Funds 9,432 - - 9,432
Taos 45- Debt Service Reserve Funds 170,371 - - 170,371
Taos 21 - Debt Service Funds 646 - - 646
Taos 70 - Debt Service Funds 4,524 - - 4,524
Taos 86 - Debt Service Reserve Funds Funds 138,381 - - 138,381
Taos 85 - Program Funds Funds 60,885 - - 60,885
Total New Mexico Finance Authority 576,916 - - 576,916
*All checking accounts are non-interest bearing
STATE OF NEW MEXICO
Town of Taos
Schedule of Deposit and Investment Accounts
June 30, 2018
See independent auditors' report.122
Schedule I
Account Bank Deposits Outstanding Book
Bank Name/Account Name Type Balance in Transit Checks Balance
Total investments 576,916 - - 576,916
Total 15,067,204$ 48,127$ 1,076,310$ 14,039,021
Add: New Mexico State Treasurer Local Government Investment Pool 4,143,964
Add: petty cash 1,841
Total deposits and investments 18,184,826$
Deposits and investments per financial statements:
Cash and cash equivalents - Exhibit A-1 12,327,117$
Investments - Exhibit A-1 4,008,564
Restricted cash and cash equivalents - Exhibit A-1 1,699,748
Restricted investments - Exhibit A-1 75,400
Fiduciary funds cash - Exhibit E-1 13,997
Investments - Exhibit E-1 60,000
Total cash, cash equivalents, and investments 18,184,826$
See independent auditors' report.123
Schedule II
Fair Market
Name of Description of CUSIP Value at
Depository Pledged Collateral Maturity Number June 30, 2018
US Bank
FHLB N/A LOC NO. 525941 1,000,000$
FHLB N/A LOC NO. 525940 9,000,000
Total US Bank 10,000,000
The location of the safekeeper of the above securities is 221 East Fourth Street, Cincinnati, OH 45202
Centinel Bank
Clovis SD 3.00%08/01/22 189414KC8 200,000
Los Alamos SD 3.90%08/01/19 54422NBL9 400,000
Lea County 4.00%07/15/21 521513AL5 200,000
Clovis SD 2.05%08/01/24 189414JA4 250,000
Espanola SD 2.125%09/01/25 29662RBA5 150,000
Lea County 3.50%06/15/20 521513AW1 685,125
Ruidoso SD 2.50%08/01/21 781338HR2 250,000
West Las Vegas 2.00%08/15/22 953769KX3 150,000
West Las Vegas 2.25%08/15/18 953769JW7 50,000
Hobbs SD 2.25%07/15/21 433866EV8 200,000
FHLB 3.88%12/14/18 3133XSUM6 791,084
Gallup McKinley 2.00%07/15/21 364010RJ9 175,030
Torrance ETC County 2.00%09/01/23 891400PE7 150,000
Alamogordo NM Muni 3.00%08/01/25 11464KQ6 250,000
Total Centinel Bank 3,901,239
The location of the safekeeper of the above securities is Independent Bankers Bank, Dallas, TX
Total Pledged Collateral 13,901,239$
STATE OF NEW MEXICO
Town of Taos
Schedule of Collateral Pledged by Depository
For Public Funds
June 30, 2018
See independent auditors' report.124
STATE OF NEW MEXICO Schedule III
Balance Balance
June 30, 2017 Additions Deletions June 30, 2018
Assets
Cash 13,884$ 16,403$ $ 16,290 13,997$
Investments 60,000 - - 60,000
Total assets 73,884$ 16,403$ 16,290$ 73,997$
Liabilities
Due to other entities 73,884$ 16,403$ 16,290$ 73,997$
Total liabilities 73,884$ 16,403$ 16,290$ 73,997$
Town of Taos
Schedule of Changes in Fiduciary Assets and Liabilities
Agency Fund
For the Year Ended June 30, 2018
See independent auditors' report.125
Page Left Intentionally Blank
126
C OMPLIANCE SECTION
127
CORDOVA CPAs LLC
CERTIFIED PUBLIC ACCOUNTANTS | BUSINESS ADVISORScordovacpas.com
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE
AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
INDEPENDENT AUDITORS’ REPORT
Town Council
Town of Taos
Wayne Johnson
New Mexico State Auditor
U.S. Office of Management and Budget
Taos, New Mexico
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards issued
by the Comptroller General of the United States, the financial statements of the governmental activities, the
business-type activities, each major fund, the aggregate remaining fund information, and the budgetary
comparisons for the General Fund and major special revenue fund of the Town of Taos (the Town), as of and
for the year ended June 30, 2018, and the related notes to the financial statements, which collectively
comprise Town’s basic financial statements, and have issued our report thereon dated December 5, 2018.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Town’s internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose
of expressing an opinion on the effectiveness of the Town’s internal control. Accordingly, we do not express
an opinion on the effectiveness of the Town’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control such that there is a reasonable possibility that a material misstatement of the Town’s
financial statements will not be prevented, or detected and corrected on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material weaknesses
or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in
internal control that we consider to be material weaknesses. However, material weaknesses may exist that
have not been identified.
128
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results
of our tests disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
We noted a certain matter that is required to be reported per section 12-6-5 NMSA 1978 that we have
described in the accompanying schedule of Section 12-6-5 NMSA 1978 findings as item 2018-001.
Town’s Responses to Findings
The Town’s response to the finding identified in our audit is described in the accompanying schedule of
findings and questioned costs. The Town’s response was not subjected to the auditing procedures applied in
the audit of the financial statements and, accordingly, we express no opinion on them.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and
the result of that testing, and not to provide an opinion on the effectiveness of the Town’s internal control or
on compliance. This report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the Town’s internal control and compliance. Accordingly, this communication is not
suitable for any other purpose.
Cordova CPAs LLC
Albuquerque, NM
December 5, 2018
129
Page Left Intentionally Blank
130
F EDERAL FINANCIAL ASSISTANCE
131
CORDOVA CPAs LLC
CERTIFIED PUBLIC ACCOUNTANTS | BUSINESS ADVISORS cordovacpas.com
REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER
COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE
INDEPENDENT AUDITORS’ REPORT
Town Council
Town of Taos
Wayne Johnson
New Mexico State Auditor
U.S. Office of Management and Budget
Taos, New Mexico
Report on Compliance for Each Major Federal Program
We have audited the Town of Taos’s (the Town) compliance with the types of compliance requirements
described in the OMB Compliance Supplement that could have a direct and material effect on each of the
Town’s major federal programs for the year ended June 30, 2018. The Town’s major federal program is
identified in the summary of auditors’ results section of the accompanying schedule of findings and
questioned costs.
Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of
its federal awards applicable to its federal programs.
Auditors’ Responsibility
Our responsibility is to express an opinion on compliance for each of the Town’s major federal programs
based on our audit of the types of compliance requirements referred to above. We conducted our audit of
compliance in accordance with auditing standards generally accepted in the United States of America; the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and
perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance
requirements referred to above that could have a direct and material effect on a major federal program
occurred. An audit includes examining, on a test basis, evidence about the Town’s compliance with those
requirements and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal
program. However, our audit does not provide a legal determination of the Town’s compliance.
132
Opinion on Each Major Federal Program
In our opinion, the Town complied, in all material respects, with the types of compliance requirements
referred to above that could have a direct and material effect on each of its major federal programs for the
year ended June 30, 2018.
Report on Internal Control Over Compliance
Management of the Town is responsible for establishing and maintaining effective internal control over
compliance with the types of compliance requirements referred to above. In planning and performing our
audit of compliance, we considered the Town’s’ internal control over compliance with the types of
requirements that could have a direct and material effect on each major federal program to determine the
auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on
compliance for each major federal program and to test and report on internal control over compliance in
accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness
of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the
Town’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or
combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility
that material noncompliance with a type of compliance requirement of a federal program will not be
prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over
compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of
compliance requirement of a federal program that is less severe than a material weakness in internal control
over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over compliance
that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal
control over compliance that we consider to be material weaknesses. However, material weaknesses may
exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of
internal control over compliance and the results of that testing based on the requirements of the Uniform
Guidance. Accordingly, this report is not suitable for any other purpose.
Cordova CPAs LLC
Albuquerque, NM
December 5, 2018
133
Federal
CFDA
Number
Federal
Expenditures
Funds
Provided to
Subrecipients
Noncash
Assistance
U.S. Department of Housing and Urban Development
Passed through State of New Mexico, Department of Finance & Administration
Community Development Block Grants 14.228 * 1,124,010$ 500,000$ -$
Total U.S. Department of Housing and Urban Development 1,124,010 500,000 -
U.S. Department of Justice
Passed through State of New Mexico, Department of Public Safety
Taos County Juvenile Accountability Block Grant 16.523 120,262 - -
STOP VAWA (Violence Against Women)16.588 60,227 - -
Total U.S. Department of Justice 180,489 - -
U.S. Department of Agriculture
Passed Through State of New Mexico Energy Minerals Natural Resources
Community Forestry Assistance Grant- Facilities 10.664 7,199 - -
Total U.S. Department of Agriculture 7,199 - -
U.S. Department of Transportation
Federal Aviation Administration (FAA) Airport Improvement Grant
Runway 12/30 Construction- Phase 2 20.106 3,666,080 - -
Memorandum of Agreement Overflight Stipulators 20.106 500,356 - -
Total U.S. Department of Transportation 4,166,436 - -
Total Federal Financial Assistance 5,478,134$ 500,000$ -$
* Denotes Major Federal Financial Assistance Program
STATE OF NEW MEXICO
Town of Taos
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2018
Federal Grantor or Pass‐Through
Grantor / Program Title
See independent auditors' report.
See accompanying notes to schedule of expenditures of federal awards.134
Schedule IV
Notes to Schedule of Expenditures of Federal Awards
1.Basis of Presentation
2.Loans
3.10% de minimus Indirect Cost Rate
4.Federally Funded Insurance
The accompanying Schedule of Expenditures of Federal Awards (Schedule)includes the federal grant activity of the
Town of Taos and is presented on the modified accrual basis of accounting,which is the same basis as was used to
prepare the fund financial statements.The information in this Schedule is presented in accordance with the
requirements of Uniform Administrative Requirements,Cost Principles,and Audit Requirements for Federal Awards
(Uniform Guidance).Therefore,some amounts presented in this schedule may differ from amounts presented in,or
used in the preparation of the financial statements.
The Town has no federally funded insurance.
The Town did not elect to use the allowed 10% indirect cost rate.
The Town did not expend federal awards related to loans or loan guarantees during the year.
See independent auditors' report.135
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STATE OF NEW MEXICO Schedule V
Town of Taos Page 1 of 2
Schedule of Findings and Questioned Costs
June 30, 2018
Section I –Summary of Auditors’Results
Financial Statements:
1.Type of auditors’ report issued Unmodified
2.Internal control over financial reporting:
a.Material weaknesses identified?None Noted
b.Significant deficiencies identified not considered to be material weaknesses?None Noted
c.Noncompliance material to the financial statements noted?None Noted
Federal Awards:
1.Internal control over major programs:
a.Material weaknesses identified?None Noted
b.Significant deficiencies identified not considered to be material weaknesses? None Noted
2.Type of auditors’ report issued on compliance for major programs Unmodified
3.Any audit findings disclosed that are required to be reported in accordance
with 2 CFR section 200.516(a)?None Noted
4.Identification of major programs:
CFDA
Number Federal Program
14.228 Community Development Block Grant
5.Dollar threshold used to distinguish between type A and type B programs:$750,000
d.Auditee qualified as low-risk auditee?Yes
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STATE OF NEW MEXICO Schedule V
Town of Taos Page 2 of 2
Schedule of Findings and Questioned Costs
June 30, 2018
Section II – Financial Statement Findings
None noted
Section III – Section 12-6-5 NMSA 1978 Findings
2018-001 Cafeteria Plan Deductions (Other Noncompliance)
Condition: During testwork over payroll and the human resource functions, we noted that the Town is including
Disability as part of the Section 125 cafeteria plan. This results in reducing the FICA and Medicare wages.
Criteria: According NMAC 6.20.2.18, the local board shall establish written payroll policies and procedures which
comply with state and federal regulations on payroll as well as maintaining strict internal controls, close supervision
and financial accounting in accordance with GAAP. In addition, Section 125 of the Internal Revenue Code provides
participants an opportunity to receive certain benefits on a pretax basis. Participants in a cafeteria plan must be
permitted to choose among at least one taxable benefit (such as cash) and one qualified benefit.
A qualified benefit is a benefit that does not defer compensation and is excludable from an employee’s gross income
under a specific provision of the Code, without being subject to the principles of constructive receipt. Qualified
benefits include the following:
• Accident and health benefits (but not Archer medical savings accounts or long-term care insurance)
• Adoption assistance
• Dependent care assistance
• Group-term life insurance coverage
• Health savings accounts, including distributions to pay long-term care services
Effect: The FICA and Medicare wage base were incorrectly reduced by the Disability payments during the year in
the amount of $12,887.
Cause: This was a mistake and oversight when the original deduction code set-up was based on the Town paying
the disability as a benefit and then switching from the Town to the employee as paying the disability and not
creating a new deduction code but using the original and was not noticed by the Town.
Auditors’ Recommendations: We recommend that the Town properly code Disability payments so that it is
excluded from the cafeteria salary reduction agreement and does not affect the FICA and Medicare wage base. In
addition, management should perform a retrospective evaluation of the effect, as a result of this, and ensure the
Town complies with all federal regulations.
Agency’s Response: Management agrees with the auditors’ recommendations. Human Resources Department made
the changes when the error was brought to our attention during the first phase of the compliance section of the audit.
This included building a new disability deduction code to ensure the disability payment was post tax. The new code
was implemented for all employees enrolled in the plan effective 8/25/2018 and will be used for all new
enrollments. A list of benefits was created that segregates pre-tax and post-tax deductions to serve as a reminder
and prompt the HR Department to update any future changes from the State of New Mexico’s benefit package.
Responsible positions: Human Resources Director, Human Resources Risk Manager along the Finance Director and
Payroll Administrator.
Section IV – Federal Award Findings
None noted
Section V – Prior Year Audit Findings
None noted
138
STATE OF NEW MEXICO
Town of Taos
Other Disclosures
June 30, 2018
Exit Conference
An exit conference was held on December 5, 2018. In attendance were the following:
Representing the Town of Taos:
Daniel Barrone - Mayor
Rick Bellis – Town Manager
Marietta Fambro – Finance Director
Nathaniel Evans – Town Councilor and Finance Audit Chair
Josephine Fresquez – Assistant Finance Director
Representing Cordova CPAs:
Robert Gonzales, CPA, Principal
Robert Cordova, CPA, Principal
Auditor Prepared Financial Statements
Cordova CPAs LLC prepared the GAAP-basis financial statements and footnotes of Town of Taos from the original
books and records provided to them by the management of the Town. The responsibility for the financial
statements remains with the Town.
139